Starting a business legally in South Africa is a sequence, and doing it in the right order saves weeks. Most of the frustration comes from attempting a step before the one it depends on.
This page sets out that sequence — what to do first, second and third — and what each step actually requires.
Business Requirements at a Glance
The sequence, in order.
- Choose the structure — sole proprietor, partnership, private company or trust — with an accountant
- Register the entity with the CIPC, where a company or co-operative
- File the beneficial ownership register with the CIPC
- Obtain a SARS tax reference number for the entity
- Open a business bank account in the entity’s name
- Register for PAYE, UIF and SDL with SARS if you employ anyone
- Register with the Compensation Fund under COIDA if you employ anyone
- Obtain the municipal business licence and sector permits the activity requires
- Register for VAT once taxable supplies exceed the compulsory threshold
Registration and Legal Requirements
Choose the structure before registering anything. A sole proprietor is simple and carries personal liability. A private company is a separate legal person, which is the main reason to register one, and it brings CIPC obligations and its own tax treatment. Which is better depends on the numbers and on your risk exposure, and it is worth an accountant’s hour before rather than two years after.
Company registration is done directly with the CIPC and the fee is published and modest. Agents charging substantially more for the same registration are providing convenience, not access.
Reserve the name if it matters, and check that the domain and the relevant trade mark position are clear. A business trading under a name someone else has registered as a trade mark has a problem it did not need.
Beneficial ownership filing is compulsory for companies and is checked by banks. File it at registration, not later.
The business bank account depends on the CIPC registration, which is why the order matters. A bank cannot open an account for an entity that does not exist or whose filings are incomplete.
Employment obligations arise with the first employee, including a director on a salary — PAYE, UIF, possibly SDL, and COIDA registration.
Documents and Ownership Information Required
What is generally required.
- CIPC registration documents, company profile and memorandum of incorporation
- Certified ID copies for every director, member or partner
- Beneficial ownership information as filed with the CIPC
- Proof of the business physical address
- A SARS tax reference number and a tax compliance status PIN
- A business bank account in the entity’s name
- Annual financial statements or management accounts
- Sector licences and permits, where applicable
Tax, Licence and Compliance Requirements
Licences depend on what you do and where. A municipal business licence is required for certain activities under the Businesses Act 71 of 1991 and municipal by-laws — food, health-related services, entertainment and others. Food premises need a certificate of acceptability from the municipal environmental health department. Confirm what applies with your municipality before trading.
Zoning matters. Operating a business from premises not zoned for it is a by-law contravention, and it applies to home businesses as well. Check with the municipality before signing a lease or converting a garage.
Sector regulators add their own. Financial services, security, health, liquor, transport, education and several others require registration with a sector regulator on top of everything else. Establish which applies to you at the start.
Consumer and data law apply from the first customer. The Consumer Protection Act 68 of 2008 governs how you sell, and the Protection of Personal Information Act 4 of 2013 governs how you handle customer and employee information, including appointing an information officer.
Employment law applies from the first employee — the Basic Conditions of Employment Act 75 of 1997, the Labour Relations Act 66 of 1995 and the Occupational Health and Safety Act 85 of 1993 among them.
Keep records from day one. The Tax Administration Act 28 of 2011 requires records supporting a return to be kept for the prescribed period, and a business without records cannot substantiate income or expenses.
Process, Deadlines and Ongoing Obligations
Free support exists and is under-used. The Small Enterprise Development Agency assists with registration, compliance and business planning at no cost, and municipal small business offices do the same.
Diarise the recurring obligations from the start: the CIPC annual return against the incorporation anniversary, the SARS filing dates, the COIDA return of earnings, and any licence renewal.
Get the tax compliance status PIN early. Customers, funders, landlords and tenders all require it, and obtaining it takes time if the entity is not compliant.
Bank all income through the business account from the first transaction. It is the single highest-return habit for a small business and it costs nothing.
Do not over-register. Registering for taxes and licences you do not need creates filing obligations and penalties for nil returns. Register for what applies, when it applies.
- Choose the structure with an accountant before registering anything
- Register with the CIPC directly — the fee is published and modest
- File the beneficial ownership register at registration
- Check the name against trade marks and domain availability
- Open the business bank account and use it from the first transaction
- Register for PAYE, UIF, SDL and COIDA on employing anyone
- Confirm municipal licence and zoning requirements before trading
- Establish which sector regulator applies to your activity
- Comply with the Consumer Protection Act and POPIA from the first customer
- Diarise the CIPC annual return and every recurring filing
Frequently Asked Questions
What should I do first?
Choose the structure with an accountant. Everything else — registration, banking, tax and licensing — follows from it, and changing it later means redoing all of them.
Do I need an agent to register a company?
No. Registration is done directly with the CIPC at a published, modest fee. Agents charging substantially more are providing convenience, not access.
What do most people forget?
Municipal licensing and zoning, and the employment registrations. Both arise before you feel like a real business and both carry penalties.
Where can I get free help?
The Small Enterprise Development Agency and municipal small business offices assist with registration, compliance and planning at no cost.
Registration processes, licensing requirements, tax obligations and employment law duties are set by the CIPC, SARS, the municipalities, the sector regulators and the Department of Employment and Labour, and are revised. Confirm current requirements with each.