What to know before starting a business in South Africa — The Small Business Site

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2. The external business might continue trading while it awaits its Co, R 20. 2 certificate. Foreign nationals should look for professional advice when considering external companies, as South Africa does not have double tax treaties with all countries. If the native land of the foreign entity is not a party to a double tax treaty with South Africa, then the external business may wind up paying income tax twice on the same earnings, which will generally be fatal to the entity's potential customers of success.

The Business Act 71 of 2008, as changed by Act 3 of 2011, governs the formation of business in South Africa. The most standard categorisation is the division between companies for earnings and non-profit business. Non-profit business (NPC) Non-profit companies are for the benefit of the public. A minimum of 3 individuals are necessary for incorporation and there are no securities to move to the general public.

For-profit business Companies for revenue fall into the following categories: state-owned companiesprivate companiespersonal liability companiespublic business. The unifying characteristic of all private companies is that they plan to generate monetary returns for shareholders. Beyond that, each has the following basic special qualities, noted below. State-owned business An organ of the federal government owns these business.

Personal companies Personal companies involve several persons, should have at least one director, and may not offer its securities (shares or debentures) to members of the public. When registered, private business have '(Proprietary) Limited' or '(Pty) Ltd.' after their name. A private company should limit transferability of shares, and limit the variety of shareholders to 50.

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Individual liability Personal liability business include one or more persons and must have a minimum of one director; directors of these companies (whether past or present) are collectively and severally liable for any debts and liabilities sustained by the business. These company types are signed up by specialists such as accounting professionals, engineers and legal representatives.

In the old business act (1973 ), these types of companies were referred to as Section 53(b) companies. Public companies Public companies are enabled to provide their shares to the general public. This Is Cool of these business is turned over to a board of directors. When registered, the business's name is followed by 'Limited' or 'Ltd.'.