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Compliance

Register Your New Company

A quick guide on what you need to do to register your business.

Chana Boucher

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Since 1 May, the Companies and Intellectual Property Registration Office (CIPRO) ceased to exist and was replaced by the Companies and Intellectual Property Commission (CIPC). The New Companies Act came into being at the same time, changing the way business owners register their companies.

The Act stipulates that no new close corporations (CC) can be registered, but those registered prior to 1 May can continue to operate as CCs.

Registering your company

The Companies Act provides for two categories of companies, namely non-profit and profit companies. Each of the different entities under these categories has specific requirements in terms of the documentation that is required.

1. Types of entities

Non-profit companies

A company incorporated for public benefit or another object relating to one or more cultural or social activities, or communal or group interests. The income and property are not distributable to its incorporators, members, directors, officers or persons related to any of them.

Profit companies

Profit companies are categorised as companies without restrictions on the transferability of their shares and that do not prohibit offers to the public (larger public companies), and companies that do contain restrictions on the transferability of their shares and that prohibit offers to the public (smaller private companies). They may take one of four different forms: a personal liability company, a state-owned company, a public company and a private company.

Personal liability companies

The directors and past directors are jointly liable with the company for any debts and liabilities arising during their periods in office. The company name ends with the word ‘incorporated’.

State-owned companies

This is a company defined as a ‘state-owned enterprise’ or a company owned by a municipality. The names of a state-owned company must end with the expression ‘SOE Ltd’

Public companies

The definition of a public company is largely unchanged. The only difference is that a public company now only requires one member for incorporation compared to seven members in the past.

Private companies

While comparable to private companies under the old Act, these are similar to previous close corporations. Some of the changes made to private companies include fewer disclosure and transparency requirements, no longer being limited to 50 shareholders, and a board that must comprise at least one director. The name of a private company must end with the expression ‘Proprietary Limited’ or ‘(Pty) Ltd’.

2. Documentation

A company is incorporated by the lodging of a Notice of Incorporation (CoR 14.1) and Memorandum of Incorporation (CoR 15.1 A-E). These forms are available for download from the CIPC’s website.

Memorandum of Incorporation

The Memorandum of Incorporation (MoI) contains the following information:

  • Details of incorporators
  • Number of directors or alternate directors
  • Share capital (maximum issued)

Notice of Incorporation

The Notice of Incorporation, which is lodged with the MoI, contains the following information:

  • Type of company
  • Incorporation date
  • Financial year-end
  • Registered address (main office)
  • Number of directors
  • Company name

– Whether the company name will be the registration number

– The reserved name and reservation number

– List of four names to be checked by the Commission

Supporting documents

To register a private company you will complete either a CoR 15.1A (for a standard private company) or a CoR 15.1B (for a customised private company) and a CoR 14.1. The supporting documents required include:

  • Certified ID copies of all indicated initial directors and incorporators
  • Certified ID copy of applicant if not the same as one of the indicated initial directors or incorporators
  • If an incorporator is a juristic person, a power of attorney is required for the representative authorised to incorporate the company and sign all related documents
  • If another person incorporates the company and signs all related documents on behalf of any of the incorporators and initial directors, a power of attorney and certified ID copy of the person is required
  • If a name was reserved before filing of incorporation documents, a valid name reservation document is necessary

Fees

The basic filing fee is R175. According to Elsabie Conradie, head: communication, marketing & stakeholder relations for CIPC, a private company can be registered within one day if the company registers without reserving a name first.

3. Register online

The CIPC’s website allows business owners to register their companies online. Once you are registered as a CIPC customer you will be able to access the transactional website. After you have logged in, look for the ‘New Companies’ link under the ‘Companies’ tab.

4. Naming your company

Under the new Act, name reservation is no longer mandatory before registering a company. If a proposed name is rejected the company may still be registered and the registration number then becomes the name of the company at incorporation until an appropriate name has been reserved. Furthermore, symbols are allowed in company names and all languages are accepted.

To register a company name, you need to complete a CoR 9.1 form. The fee for a manual application is R75 for each name, while electronic is R50. You should indicate up to four alternatives to be considered for reservation in the listed order while only one will be registered. You are also required to indicate whether any word, number or other element constitutes a registered trademark, and provide supporting documents for an associated name. The applicant of a name reservation must be the applicant on the new company registration documents, and will need to include a certified copy of their ID.

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When it comes to the New Companies Act you better start getting used to the words responsibility and accountability. Here’s why

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3 Comments

3 Comments

  1. Security100

    Dec 15, 2011 at 12:53

    Great article! Tried to follow the instructions to register a company!! What a joke!! The site is terrible, non user-friendly AT ALL! Cannot find anything I need to do my application on line!! It tells me to deposit money into my virtual account (didn’t realise they were a gambling site too). I must say that for a starting entrepreneur trying to do things the right way, and attenpting to register a company is IMPOSSIBLE!!! I have no clue where to start and the advice given above has done me no service except waste my time!!!

  2. Philip Rubin

    Sep 15, 2012 at 16:22

    I have a cc that I registered about two years ago and that I have now franchised. A potential franchisee told me a week ago that he was able to choose the same name of my cc and register it as a pty. how is this possible? I would have thought that name reservation applied across the cc and pty spectrum?

  3. leasther Hwindingwi

    Dec 1, 2012 at 11:22

    now my question is how do i do that because i am a Zimbawean trying to register a company in RSA.

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Company Posts

An Introduction To COID Registration And The Letter Of Good Standing

Company Partners is a leading COID Registration Service Provider in South Africa. They also assist Companies to obtain a Letter of Good Standing from COIDA.

Company Partners

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Compensation for Occupational Injuries and Diseases Act

What is COIDA?

The Compensation for Occupational Injuries and Diseases Act (Act 130 of 1993) replaced the “Workmen’s Compensation Act” (Act No. 30 of 1941), and was amended in 1997.

The Compensation Fund provides compensation for occupational injuries or diseases sustained or contracted by employees in the course and scope of their employment, or their dependents for death resulting from such injuries or disease, and to pay reasonable medical expenses incurred.

Who must register with COID?

According to prescription, anyone who employs one or more part- or full time workers must register with the Compensation Fund and pay annual assessment fees. The Compensation Fund is a trust fund that is controlled by the Compensation Commissioner and employer contributes to the Compensation Fund. The Commissioner is appointed to administer the Fund and approve claims lodge by employees or their dependants.

An employer must register with COID within seven days after the day on which he employs his first employee. An employer must register with the Commissioner by submitting Form W.As.2 with the particulars required therein to the Commissioner.

During COID registration copies of the following documentation should be included:

  • the registration certificate from the Register of Companies if they are a company or closed corporation;
  • or their ID document, if they are sole owners of the business.

What are assessment fees?

The annual assessment fee is of an employer is based on their employee’s earnings and the risks associated with the type of work or profession. Before 31 March each year, all employers (including contractors) must submit a statement (return) of earnings reflecting amount paid to all their workers from the beginning of March to the end of February.

Assessment tariffs, reviewed annually, are based on the risks related to a particular type of work.

Payment of assessments

  • Employers must pay within 30 days of receiving the notice of assessment;
  • Employers must apply in writing to settle assessments in installments (not exceeding 12 months);
  • 20% of the outstanding balance due is required upfront before instalment arrangements can be applied for;
  • Should the instalment fall overdue, the full amount becomes due and payable immediately.

Failure to comply may result in:

  • Penalty can be imposed for late submission of ROE (Sect 83(2) – 10%);
  • Estimations will be done if no returns (ROE) are submitted (Sect 83(6)(a);
  • Penalty on non-payment of assessments (Sect 87(1) – 10%);
  • Interest on late payment of assessment (prevailing prime rate);
  • Penalty for late reporting of accidents
  • A penalty is imposed where an employee meets an accident / death and employer is not registered with the Compensation Fund (not exceeding full compensation payable to the employee (Sect 87(2)(a))
  • An employer who fails to comply with a provision of this section shall be guilty of an offence – Sect 81(3)

Contractors and sub-contractors: 

  • Contractors and sub-contractors must register with the Compensation Fund and pay assessments;
  • Failure to comply with the COID Act by the sub-contractor will make the mandatory or main contractor to be responsible for any claims from the sub-contractor’s employees (thus the need for a letter of good standing);
  • The contractor may recover any such payments directly from the sub-contractor.

Letter of Good Standing:

The Letter of Good Standing is a certificate issued by the Compensation Fund to verify that a business actually exists, has paid all its statutory dues, has met all filing requirements and, therefore, is authorised to operate.

Conditions when applying for a letter of good standing:

  • Employer must be registered with the Fund as per section 80 of the COID Act,
  • Employer must have submitted all returns of earnings as per section 82 0f the COID Act,
  • Employer must be fully assessed as per section 83 of the COID Act,
  • Employer must have paid/ settled all outstanding debt as per section 86 of the COID Act.
  • Employers that have entered into an instalment arrangement will only be issued with a letter of good standing on a month‐to‐month basis.

Related: Register A Company In South Africa

What happens if an employee is injured?

employee-injury

The amount of compensation paid to you, depends on how much you were earning when you got injured or diagnosed. If you’ve stopped working by the time a disease is diagnosed, the compensation will be worked out according to what you would’ve been earning.

Types of compensation:

Medical costs: All your medical expenses will be paid for up to 2 years, from the date of the accident or the diagnosis of the disease. You are free to choose a medical service provider you want to consult with. All medical accounts and reports should be submitted to the Commissioner.

Temporary disability:  When you’re unable to work or can’t do all your work because of an injury or disease.

All medical expenses are also paid if the medical accounts are submitted to the Commissioner.

You can claim compensation for temporary disability for 1 year. This can be extended to 2 years, after which the Commissioner may decide that the condition is permanent and grant compensation on the basis of permanent disability.

Permanent disability:  A permanent disability is an injury or illness that you will never recover from. The seriousness of the disability will determine whether you’ll never be able to work again or whether you’ll find work more difficult.  If the disability is more than 30% disability, you will get paid a monthly pension. The size of the pension depends on what your wages were and on the seriousness of the disability.  If the disability is 30% or less, you’ll get paid a lump sum. The lump sum payment is a once-off payment.

Death benefits:  Burial expenses will be paid and the spouse of the deceased and children under the age of 18 (including illegitimate, adopted and step-children) are entitled to compensation.  If a family member that earns money to support the family (breadwinner) is killed by an occupational injury or disease, dependants can claim from the fund.

Company Partners

Company Partners is a leading COID Registration Service Provider in South Africa. They also assist Companies to obtain a Letter of Good Standing from COIDA.

Established in 2006, Company Partners guarantees that the services they offer meet the standards of the best in the industry. Over 30 full-time Consultants offer services and standards of the highest quality.


Useful Links

  1. COID Registration
  2. Letter of Good Standing

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Compliance

How To Stay On The Right Side Of The Law With A Marijuana Business

The verdict is in: It’s not (yet) legal to commercially grow cannabis, but there are multiple business opportunities for home growers that are on the right side of the law.

Nicole Crampton

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“The use, possession and cultivation of cannabis outside of a private space, or by, or around, under-age persons, still remains illegal,” says Paul-Michael Keichel, Partner at Schindlers Attorneys. “The caveat to this appears, however, to be that you may carry concealed cannabis in public, if the intention is to only consume it in a private space, away from under-age or non-consenting individuals.”

“What we are seeing is that most of our clients’ focus has been on the cultivation and commercialisation of cannabis itself. What is seemingly being overlooked are the secondary industries that will emerge or benefit from the legalisation of cannabis,” explains Maurice Crespi, Partner at Schindlers Attorneys.

“Take our M&R (medical and recreational) Cannabis Department as an example. Whilst not planned, it has emerged as a key department at Schindlers Attorneys. If cannabis legalisation presents an opportunity for attorneys, it begs the question as to what industry would not be presented with some form of opportunity as a result of its legalisation.

“Transport, courier services, injection moulding, advertising, fashion, accountants, medical, textiles and so on, are now all in a position to exploit the legalisation of cannabis to their benefit. I’m yet to think of an industry that will not be in a position to benefit from the legalisation of cannabis. Even Coca-Cola has found a way,” says Maurice.

Related: 10 Cannabis Business Opportunities You Can Start From Home

Grey areas yet to be resolved

“The question that has been left open, of course, is how and where does one get the cannabis seeds to grow the plants that one is now permitted to cultivate at home, or in private? Must these be shared, or can they be sourced or sold commercially?” says Paul-Michael.

“Until this answer is clear (we’re researching presently), it’s better to err on the side of caution. However, now that the major part of the fight is lost for them, I would be very surprised if Parliament doesn’t start appreciating the massive potential for increased tax revenue that would flow from a formalised and regulated cannabis industry.

“It serves almost everyone’s interests for them to entertain this option, especially because studies show that full legalisation decreases associated harms more than decriminalisation. Consider quality control, de-stigmatisation, elimination of the black market, beneficiation, and the list goes on,” explains Paul-Michael.

“That stated, SAHPRA (www.sahpra.org.za) is entertaining licence applications by growers and distributors for medicinal use of cannabis. The requirements are very tight but, for those able to comply and get licences, the commercial opportunity is almost unquantifiable,” says Paul-Michael.

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Compliance

Innovative Business Solutions And Compliance

Compliance with certification is a strong way to demonstrate that you are managing your business proactively.

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As a business owner, you are probably aware of where your business could improve. Sometimes a business owner would like to improve their business but is not sure how to begin. Therefore, it is of the utmost importance to develop an environment which will foster innovation and create key steps to improve your business while simultaneously trying to comply with all of the necessary legalities.

It is important for an entrepreneur to assess their situation first. Most business owners will ask the question why? Why can’t everyone will follow the same steps to success. Every business is different and unique, therefore, before you start making changes within your business, it is a good idea to make sure you have a full understanding of the factors affecting your business success and whether you are complying with necessary legalities.

Compliance may actually improve performance by giving your business a competitive edge. Legal compliance can assist you with improving your customer relations, enhancing your reputation and most importantly avoiding the cost of legal proceedings.

There’s this saying, ‘What gets measured gets improved’ explains Charles Gaudet, founder and CEO of Predictable Profits, a consulting firm that offers advanced marketing techniques to entrepreneurs who are passionate about expanding their small businesses.

Related: Compliance For Entrepreneurs

Here are a few strategies that you can use to make your business more profitable in the future.

Innovative Marketing solutions

For every business owner, marketing is an important tool to improve their businesses. You may think that you are missing an opportunity if you don’t jump right attracting customers with some type of marketing message.

However, as quoted by John Rampton ‘’one of the best things you can do to achieve growth is to slow down and spend time studying the trends.” What does this mean?  While rushing into marketing your product you tend to forget certain details, and once it is out in the public its difficult to forget or to undo. Therefore, its very important to research the market and consumer trends before launching anything.

This becomes very important when you consider the potential risk to your business for the infringement of another product, which is confusingly similar to your product. You also do not wish to be guilty of using a similar brand name, slogan or logo as one of your competitors.  Therefore, before you set out your personalised solutions when designing ads and directing messages to consumers ensure you are not infringing on anyone else’s rights as this will likely lead to expensive legal costs for your business.  

Compliance Breeds Confidence

It is important to remember that clients are concerned whether suppliers are properly compliant. Compliance with certification is a strong way to demonstrate that you are managing your business proactively and that the money a customer will spend i.t.o. buying your goods or services, is in safe hands. Conversely a failure in compliance can, as well as exposing you to the risk of regulatory sanctions, severely damage your business’ credibility.

Related: Why HR Legislation Compliance Can Curb Business Failure

For example, in the financial services industry there is an increasing requirement to demonstrate strong security to both external auditors and prospective customers.

With regulation that you feel is of no value, determine how to satisfy the requirements with the minimum effort necessary. Do, however, double check that you are not missing out on a benefit that may be rewarding for your business.

In conclusion, it is important to note when improving your business one always need to act in accordance with the correct laws and procedures. Therefore, if a company is embracing the difficult task of being compliant, I recommend using this as a competitive weapon to improve your business. It just might end up making you and your team better which is usually rewarded with more business.

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