What type of business should I Register?

Entrepeneur thinking about what type of business to register | J29 Business Simplified | South Africa
There are many different types of business entities to register. Which one is best for you? Read more....

A registered business could open new doors for your business. In most cases potential clients prefer doing business with a registered business.  So what type of business should you register?

Here are 3 types of common business entities to consider

Sole-proprietor or sole trader

This is the easiest type of business to start without the need to register. No formal registration required here are the steps to follow:

  • Simply go into the bank with Identity document and proof of address to open your account
  • Owner makes business decisions and is personally liable for any debt
  • Administration is minimized as no financial reporting is required in terms of financial statements and management accounts
  • Taxation can increase because your business and personal income is combined

Private company (Pty Limited)

This is the most common type of business registered and the great part, is it can all be done online. Pty Limited is a formally registered business and legal entity which includes compliance of annual returns and taxation compliance. Financial statements must be prepared annually for tax purposes.

  • Clients may prefer doing business with a registered business
  • Minimum of 1 director, Maximum of 50
  • Formal business registration required to register a Pty Limited
  • Registration process can take up to10 days
  • Pty Ltd can apply for business finance at financial institutions
  • Cost is R175
  • Register online at cipc.co.za some banks in South Africa also provide business registration services on their websites
  • You will need the following when registering your business:
  • Four business names in order of preference (do a name reservation to check if the name you chose is available)
  • Certified Identity documents of all shareholders and directors
  • Proof of address
  • Documents required for signing when registered will be available online

Non – profit company (NPC)

This type of company should be considered if your business is dependent on sponsorships and donations.  The objectives of NPC is not linked to profit generation however, sound financial and cash flow management is highly important. Legally this entity will qualify for sponsors and donations. This type of business is generally suited to Social Entrepreneurship.

  • Registration is done manually by completing forms which can be downloaded from cipc.co.za 
  • Financial statements must be prepared and available to sponsors and donors
  • Credibility and sound financial management will attract sponsorship

Examples of NPCs’:  Charity Organizations, Churches, Soccer Clubs

ADDITIONAL BUSINESS ENTITIES INCLUDE:

Co-operatives, Public Companies

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