Category Archives: Company law

Aspects to consider when buying a business or a company

There are many aspects to be considered when buying a particular business to ensure that you are making the correct (and hopefully profitable) decision.

In the commercial world transactions for the acquisition of a business takes the form of either a sale of business agreement or a sale of shares agreement.  The transactions are distinct from each other and have different legal consequences.

Purchasing a business means that you are acquiring ownership from an individual or a company of assets which generates an income as well as liabilities (debts) which were incurred in generating that income.  Generally, the seller will be liable for all debts of the business until take over by the purchaser.  The sale may also include aspects regarding contracts entered into with suppliers and customers, intellectual property rights (designs or trade marks), accounts receivable and cash in the bank.

Purchasing shares in a company means that you are acquiring ownership of a legal entity which has separate legal personality and which owns and operates a business (or several businesses).  The purchase of shares in a company will include all the debts incurred by the Company before the shares are transferred (i.e. suppliers, SARS, or third parties).  This is generally why purchasers usually insist on a proper due diligence investigation into the affairs of the company concerned.

A sale of business agreement may be more appropriate if there is uncertainty about undisclosed liabilities, if all shareholders of the company are unwilling to sell their shares, or if the company conducts more than one business.

A sale of shares agreement may be more appropriate if important agreements are entered into by the company (i.e. license or supply agreements) which are incapable of transfer, the shareholders of the company insist on selling their shares rather than selling the business out of the company, or tax considerations would be more favorable.

It is always advisable to obtain comprehensive legal and tax advice to avoid unforeseen and unwanted legal consequences after acquiring your business.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein.  Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Email management system? Get it before it gets you

If your company uses emails to communicate with clients, then it’s not enough to just rely on traditional ways of managing email, such as backing up emails periodically. There needs to be a well-equipped email management system in place that will keep your business safe.

The key point that relates to the heavy use of email, is the maintenance of the integrity of the email, and being able to prove that integrity. Unfortunately, you can’t simply do nothing and leave your email system as is and hope for the best. Firstly, it is important to understand the legal requirements. This includes the Electronic Communications and Transaction Act, 2002, or the ECT Act.

The ECT Act provides that information is not without legal force and effect simply because it is in electronic form. These are some of the rules set out by the ECT Act regarding electronic communications.

  1. An electronic document must be captured, retained and retrievable.
  1. Electronic documents must be accessible so as to be useable for subsequent reference, this includes the origin, destination, date and time it was sent or received.
  1. If a signature is required, it must be accompanied by an authentication service.

So what should you do?

All companies who wish to comply with the regulations should implement an effective email management system. The core requirements of a good email management system are as follows:

  1. The ability to monitor and intercept email;
  1. Effective capturing of all email;
  1. Cost effective storage of all email and efficient discarding of email that has lost its business value or is no longer required for legal or regulatory or compliance;
  1. Efficient and cost effective restoration of email;
  1. The ability to maintain the integrity of email and the contents thereof; and
  1. The ability to audit email use in order to be able to prove integrity.

Although it seems like a trivial matter, it is worthwhile to implement an email management system in your company. It will help protect your business in the event that you need a record of communication due to an incident or contract dispute. New regulations introduced by POPI will also make this a necessary part of how your company handles information.

Reference:

  • The Electronic Communications and Transaction Act, 2002

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Requirements to restore a deregistered company

There are various circumstances in which a company (or close corporation) can become deregistered at the CIPC.

1. The company itself can apply for deregistration at the CIPC, for any number of reasons.

2. If a company has not submitted and paid its annual returns for more than two successive years, the CIPC will inform such a company of the fact and the intention of the CIPC to deregister said company. If such a company does not take any steps to remedy the situation, the CIPC will proceed to finally deregister it.

3. If the CIPC believes that the company has been inactive for seven or more years.

How can a company be restored?

It is possible to restore such a company or close corporation which has been finally deregistered, but all outstanding information and annual returns (including the fees) will have to be lodged with the CIPC. An additional R200 prescribed re-instatement fee must also be paid.

Recently, the CIPC has set additional requirements to do this, which also impacts on the time, administration and cost to restore such a company. These requirements took effect from 1 November 2012.

The steps and requirements for the re-instatement process are:

  1. The proper application CoR40.5 form Application for Re-instatement of Deregistered Company must be completed and submitted, originally signed by the duly authorised person.
  1. A certified copy of the identity document of the applicant (director / member) must be submitted.
  1. A certified copy of the identity document of the person filing the application must be submitted.
  1. A Deed Search, reflecting the ownership of any immovable property (or not) by the company, must be obtained and submitted together with the application.
  1. If the company does in fact own any immovable property, a letter from National Treasury must be submitted, indicating that the department has no objection to the re-instatement of the company.
  1. Also, if the company does in fact own any immovable property, a letter from the Department of Public Works must be submitted, indicating that the department has no objection to the re-instatement of the company.
  1. An advertisement must be placed in a local newspaper where the business of the company is conducted, giving 21 days’ notice of the proposed application for re-instatement.
  1. If the deregistration was due to non-compliance with regards to annual returns, an affidavit indicating the reasons for the non-filing of annual returns must be submitted.
  1. If the company itself applied for deregistration, an affidavit indicating the reasons for the original request for deregistration must be submitted.
  1. Sufficient documentary proof indicating that the company was in business or that it had any assets or liabilities at the time of deregistration must be submitted.
  1. All outstanding annual returns must be submitted and paid, along with any penalties.

Upon compliance of all of the above requirements, the CIPC will issue a notice to the company that it is restored.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

An Introduction: MOI & Shareholders Agreement

1. Memorandum of Incorporation

The Memorandum of Incorporation (“MOI”) is the founding document of company which, in conjunction with the Companies Act, 2008 (Act No. 71 of 2008) (“Act”), regulates the governance and affairs of a company. It sets out rights, duties and responsibilities of shareholders, directors and others within and in relation to a company, and other matters dealt with in section 15 of the Act.

Section 15 of the Act, amongst others, provides for deviation from the standard provisions set out in the Act and permits the MOI to –

  • deal with a matter that the Act does not address;
  • alter the effect of any alterable provision of the Act (i.e. a provision that may be negated, restricted, limited, qualified, extended or otherwise altered in substance or effect);
  • impose on the company a higher standard, greater restriction, longer period of time or any similarly more onerous requirement, than would otherwise apply to the company in terms of an unalterable provision of the Act (i.e. a provision that may not be negated, restricted, limited, qualified, extended or otherwise altered in substance or effect).

It is important to note that the MOI is a public document, which is filed with the Companies and Intellectual Property Commission (“CIPC”). Any person can, subject to payment of the prescribed fee, obtain a copy of a company’s MOI from CIPC. Confidential company matters are therefore best dealt with in the Shareholders Agreement (a private document) and not in the MOI.

  1. Shareholders Agreement

In terms of section 15(7) of the Act, the shareholders of a company may enter into any agreement, with one another concerning any matter relating to the company (namely a Shareholders Agreement), provided that such agreement must be consistent with the Act and the company’s MOI.

Any provision of a Shareholders Agreement that is inconsistent with the Act or the company’s MOI is void to the extent of the inconsistency, it is therefore important to carefully align a Shareholders Agreement to ensure its validity and enforceability.

Unlike the MOI, a Shareholders Agreement is not filed with CIPC and is not available to the general public. It is a private document which, among others, regulates the confidential affairs of the company, such as funding, voting, deemed offers, forced sales, come along, tag along, deadlock and other significant issues.

  1. Summary

In order to ensure good governance, transparency and accountability a company should definitely have a properly drafted MOI and Shareholders Agreement. A company’s MOI and Shareholders Agreement must further be aligned with one another and the Act, falling which it could have negative and / or unintended consequences.

It is essential to consult a qualified commercial attorney to assist with the preparation a customized MOI and Shareholders Agreement, to ensure statutory compliance and to limit potential disputes between stakeholders.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

How to register a new company

The basic steps to register a company under the Companies Act of 2008 at the Companies and Intellectual Property Commission (CIPC) involves certain forms and supporting documentation that must be lodged and the accompanied fees paid.

The steps

The first step in registering a new company is optional. A CoR9.1 form must be completed and lodged with the CIPC in order to reserve a name for the company to be registered. However, the Act does make provision for a company to be registered without a name. The company registration number will then be the name of the company until such time as the company properly registers a name. A certified copy of the identity document of the applicant must be submitted as supporting documentation with this form and a filing fee is payable.

The next step is to complete and lodge the CoR14.1 Notice of Incorporation form together with the CoR15.1 Memorandum of Incorporation.

The Notice of Incorporation specifically contains information regarding the type of company to be registered, the incorporation date, financial year end, registered address, number of directors and the company name if applicable. A certified copy of the identity document of the applicant must be submitted as supporting documentation and a filing fee is payable. A CoR14.1A form contains specific information about the directors of the company who will be appointed at registration, and this form must be lodged together with the Cor14.1. Certified copies of the identity documents of all directors to be appointed must be submitted as supporting documentation. An optional form CoR14.1D may be lodged together with the CoR14.1, which indicates any company appointments to be registered with the CIPC, such as a company secretary or auditor.

The Memorandum of Incorporation is probably the most important document when registering a company, since the provisions contained herein will govern the company. It can be short and simple, or long and extremely technical, depending on what type of company is being registered. In this regard, it is best to seek professional advice. The supporting documentation and filing fees applicable will depend on what type of Memorandum of Incorporation is being registered.

If an auditor or company secretary is appointed at registration as contained in the CoR14.1D, a CoR44 form must also be completed and submitted. No filing fee is payable for this form. An original acceptance letter and certified copy of the identity document of the auditor or company secretary must be submitted as supporting documentation.

The CoR21.1 Notice of Registered Address must be completed with the particulars of the registered address of the company. Again a certified copy of the identity document of the applicant must be submitted as supporting documentation, but no filing fee is payable.

Once all the necessary forms and supporting documentation has been submitted and applicable fees paid, the CIPC will issue a Registration Certificate form CoR14.3 if it is satisfied that all provisions in the Act has been satisfied.

Any changes to the information placed on record at the CIPC at the original registration of the company, must be registered without delay and on the proper forms and possible payment of applicable filing fees.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Financial assistance by companies to issue shares

Section 38 of the Companies Act, 61 of 1973 (now repealed) contained a prohibition against companies issuing shares to prospective shareholders on loan account. This was identified as one of the hurdles in the way of BEE empowerment deals specifically (which quite often involves BEE participants requiring funding to be able to subscribe for shares in a company). Consequently, this was addressed in the Companies Act, 71 of 2008, through the introduction of section 44 which now specifically provides for new share issues to be undertaken on loan account, subject thereto that this is not prohibited by the company’s memorandum of incorporation.

The board of directors of a company may now authorise financial assistance to be provided by the company by way of a loan, guarantee or the provision of security to any person for the purpose of subscribing for shares issued in that company. However, and despite any provision of a company’s memorandum of incorporation, the company’s directors may not authorise any financial assistance unless the financial assistance is for either an employee share scheme, or has been authorised through a special resolution by the shareholders of the company. (A special resolution involves a resolution adopted with the support of at least 75% of the voting rights exercised on the resolution, or a different percentage which may potentially be allowed for in the company’s memorandum of incorporation.) In addition, the company’s directors must be satisfied that the terms of the loan (or other form of financial assistance) is fair and reasonable to the company, and that the company would, after providing the financial assistance, still be both solvent and liquid. If the company’s memorandum of incorporation specifically imposes certain further conditions on the company granting financial assistance for the issuing of its shares, these requirements too need to be adhered to.

Any agreement to provide financial assistance which would be contrary to the requirements set out above in terms of either section 44 of the Companies Act, or the memorandum of incorporation of a company, would be void. Directors in breach of this may be held personally liable for damages caused.

The new regime in the ‘new’ Companies Act is enabling for business, but directors should caution against applying this without due consideration to the above requirements. Of specific relevance would be if for example the recoverability of a loan granted to enable the borrower to subscribe for shares is doubtful. If this is the case, the duty of care of the directors towards the company may be called into question by other shareholders prejudiced as a result, potentially leading to delictual claims against the directors in personal capacity for not displaying the statutory required duty of care towards the company.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Wie mag as direkteur aangestel word?

A1_BSekere mense kom nie in aanmerking om as direkteure van ‘n maatskappy aangestel te word nie. In hierdie artikel kyk ons na wie van direkteurskap uitgesluit word, sowel as die gevolge van die optrede van sodanige persoon wat as direkteur optree.

Volgens artikel 69(3) van die Maatskappywet 71 van 2008, mag ‘n maatskappy nie wetend ‘n gediskwalifiseerde persoon aanstel as direkteur nie. Dit sluit in die situasie waar die maatskappy redelikerwys moes geweet het dat die persoon gediskwalifiseer is.

In artikel 68(7) vind ons ‘n lys van persone op wie daar ‘n absolute verbod gelê is, wat insluit ‘n regspersoon, minderjariges of enige persoon wat gediskwalifiseer is in terme van die Memorandum van Oprigting. Artikel 69(8) lys persone wat tydelik onbevoeg is om direkteur te wees, wat insluit iemand wat deur die hof verbied is, iemand wat deur die hof as ‘n misdadiger verklaar is, ‘n ongerehabiliteerde insolvente persoon wat op grond van wangedrag uit ‘n vertrouensamp verwyder is na oneerlikheid, en persone wat skuldig bevind is aan ‘n kriminele oortreding en wat tronkstraf opgelê is sonder die keuse van ‘n boete, of ‘n hoër boete opgelê is omdat hulle skuldig is aan enige vorm van oneerlikheidsmisdaad. [1]

‘n Vraag wat hier ontstaan, is wat die effek van die optrede van ‘n verbode direkteur is. Artikel 69(4) bepaal dat ‘n persoon onmiddellik ophou om ‘n direkteur te wees indien hy gediskwalifiseer word, maar artikel 71(3) bepaal aan die ander kant dat, indien ‘n aandeelhouer beweer dat ‘n persoon gediskwalifiseer is, die persoon deur ‘n direksiebesluit verwyder moet word voordat hy ophou om ‘n direkteur te wees. Dit beteken dat enige optrede wat deur so ‘n persoon gedoen is, geldig en bindend op die maatskappy sal wees ten spyte van sy onbevoegdheid, tensy die derde party wat in die optrede betrokke was, bewus was van die feit dat die persoon gediskwalifiseer was.[2]

Daar is ses gronde ingevolge artikel 162(5) (a)-(f) vir ‘n misdadigheidsbevel. ‘n Hof moet ‘n misdadigheidsbevel maak as die persoon:

1. ingestem het om as direkteur te dien, of in die hoedanigheid van ‘n direkteur of voorgeskrewe beampte, terwyl hulle nie gekwalifiseerd is om ‘n direkteur te wees nie;

2. opgetree het op ‘n wyse wat in stryd is met ‘n proefbevel;

3. sy posisie erg misbruik het;

4. persoonlike voordeel uit inligting of ‘n geleentheid verkry, of opsetlik of deur growwe nalatigheid skade berokken aan die maatskappy of ‘n filiaal;

5. opgetree het op ‘n wyse wat neerkom op growwe nalatigheid, opsetlike wangedrag of verbreking van vertroue; of opgetree het op ‘n wyse wat in artikel 77(3) (a), (b) of (c) beoog is;

6. herhaaldelik persoonlik onderworpe was aan ‘n voldoeningskennisgewing of soortgelyke afdwingingsmeganisme;

7. ten minste twee keer skuldig bevind is aan ‘n misdaad, of onderwerp is aan ‘n administratiewe boete of soortgelyke straf; of

8. binne ‘n tydperk van vyf jaar ‘n direkteur van ‘n maatskappy of ‘n bestuurslid van ‘n beslote korporasie was, of beheer of deelgeneem het aan die beheer van ‘n regspersoon wat skuldig bevind is aan ‘n misdryf, of ‘n boete of soortgelyke straf ontvang het. [3] & [4]

Wanneer iemand as ‘n misdadiger in terme van artikel 162(5) (a) of (b) verklaar is, is dit onvoorwaardelik en vir die leeftyd van die persoon. Wanneer iemand as ‘n misdadiger in terme van artikel 162(5) (c)-(f) verklaar is, is dit tydelik en vir ‘n minimum van 7 jaar. [5]

Dit is dus baie belangrik by die aanstelling van ‘n direkteur om seker te maak dat hulle in terme van die nuwe Maatskappywet bevoeg is en daarom moet ‘n mens behoorlik navorsing doen oor ‘n persoon voor hulle aanstelling as direkteur van ‘n maatskappy. As jy dit nie doen nie, sal die maatskappy waarin jy aandele hou moontlik die gevolge van hierdie ongekwalifiseerde persoon se dade moet dra.

Verwysingslys:

  • Maatskappywet 71 van 2008
  • FHI Cassim et al Contemporary Company Law (2012)

[1] Artikel 69(7) – (8) van die Maatskappywet 71 van 2008.

[2] Artikel 69(4) en 71(3) van die Maatskappywet 71 van 2008.

[3] Artikel 162(5) (a)-(f) van die Maatskappywet.

[4] FHI Cassim et al Contemporary Company Law (2012) 435 – 437.

[5] FHI Cassim et al Contemporary Company Law (2012) 438.

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies. (E&OE)

Who may be appointed as director?

A1_BCertain people are not eligible to be appointed as directors of a company. In this article we look at who is disqualified from being a director as well as the effects of the actions of such persons while still acting as director.

A company must not knowingly permit an ineligible or disqualified person to serve or act as a director, according to section 69(3) of the Companies Act 71 of 2008. “Knowingly” includes the situation where the company should reasonably have known that the person is ineligible or disqualified.

Section 69(7) lists the persons on which there are an absolute prohibition, being juristic persons, minors or any persons disqualified in terms of the Memorandum of Incorporation. Section 69(8) lists the persons that are disqualified on a temporary basis, being someone who has been prohibited by the court or whom the court has declared a delinquent, unrehabilitated insolvents, persons who were removed from an office of trust on the grounds of misconduct involving dishonesty, and persons who were found guilty of a criminal offence and imprisoned without the option of a fine, or were ordered to pay a higher fine for being found guilty of any dishonesty crimes.[1]

A question that arises here is what the effect would be of appointing a prohibited director. Section 69(4) says that a person immediately ceases to be a director if they are prohibited from being a director, but section 71(3) states that if a shareholder alleges that a person is disqualified then the person must be removed by a board resolution before they cease to be a director. This means that any act done by such a person, despite his disqualification, will be valid and binding on the company unless the third party who was involved in the act was aware that the person they were dealing with was disqualified.[2]

Section 162(5) (a)-(f) sets out the grounds for an order of delinquency. A court must make an order declaring a person to be a delinquent director if the person:

1. consented to serve as a director, or acted in the capacity of a director or prescribed officer, while ineligible or disqualified to be a director;

2. acted as a director in a manner that contravened an order of probation;

3. grossly abused the position of director while being a director;

4. took personal advantage of information or an opportunity, or intentionally or by gross negligence inflicted harm upon the company or a subsidiary while being a director;

5. acted in a manner that amounted to gross negligence, wilful misconduct or breach of trust while being a director; or as contemplated in section 77(3) (a), (b) or (c);

6. has repeatedly been personally subject to a compliance notice or similar enforcement mechanism;

7. has been convicted of an offence at least twice, or subjected to an administrative fine or similar penalty; or

8. was a director of a company or a managing member of a close corporation, or controlled or participated in the control of a juristic person that was convicted of an offence, or subjected to a fine or similar penalty, within a period of five years. [3] & [4]

If a person is declared a delinquent in terms of section 162(5) (a) or (b) it is unconditional and for the lifetime of the person. If a person is declared a delinquent in terms of section 162(5) (c)-(f) this is temporary for a minimum of 7 years.[5]

It is therefore very important, when appointing a director, to make sure that he is qualified in terms of the new Companies Act. One must do proper research about a person accordingly before appointing him as a director of a company because it is possible that if you do not do so, the company in which you are a shareholder may have to bear the consequences of the actions of this disqualified person.

References:

  • Companies Act 71 of 2008
  • FHI Cassim et al Contemporary Company Law (2012)

[1] Section 69(7) – (8) of the Companies Act 71 of 2008.

[2] Section 69(4) and 71(3) of the Companies Act 71 of 2008.

[3] Section 162(5) (a)-(f) of the Companies Act.

[4] FHI Cassim et al Contemporary Company Law (2012) 435 – 437.

[5] FHI Cassim et al Contemporary Company Law (2012) 438.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Basiese registrasies en nakoming vir besighede

Delport_mayVir enige besigheid wat in Suid-Afrika sake doen, is dit ‘n uitdaging om op die hoogte te bly van alle vereiste registrasies en nakoming wat deur wetgewing en ander regulering voorgeskryf word. Hier volg ‘n opsomming van die mees algemene registrasies en nakoming wat op die meeste besighede van toepassing is.

  1. Jaarlikse opgawes en jaargelde (Maatskappye): Enige maatskappy wat by die CIPC geregistreer wil bly, moet jaarliks gedurende die maatskappy se verjaardagmaand ‘n opgawe van inligting by die CIPC indien en ook die gepaardgaande jaargeld betaal.
    (www.cipc.co.za)
  2. Inkomstebelasting: Enige onderneming wat handel dryf moet by die Suid-Afrikaanse Inkomstediens (SAID) as ‘n belastingbetaler registreer, hetsy as individu/eenmansaak, maatskappy, trust, of enige ander persoon. Jaarliks moet hierdie onderneming ‘n inkomstebelastingopgawe (IB12 of IB14) voltooi en indien. Verder moet daar elke ses maande voorlopige belasting bereken en ‘n opgawe (IRP6) ingedien word, en indien nodig, moet enige verskuldigde bedrag ook betaal word. Nie-nakoming kan aansienlike boetes tot gevolg hê. (www.sars.gov.za)
  3. Belasting op Toegevoegde Waarde (BTW): Indien die jaarlikse omset van die onderneming R1 miljoen sal oorskry, moet die onderneming vir BTW registreer. ‘n Vrywillige registrasie kan gedoen word indien die omset meer as R50 000 per jaar sal wees. BTW-opgawes moet gewoonlik elke twee maande ingedien word en, indien nodig, moet enige verskuldigde bedrag ook betaal word. (www.sars.gov.za)
  4. Werkloosheidsversekering: Indien ‘n onderneming werknemers in diens het, moet die onderneming as werkgewer vir werkloosheidsversekering registreer. Maandelikse opgawes vir betaling moet ingedien word. ‘n Bedrag gelykstaande aan een persent van die salarisse van werknemers is deur die werkgewer betaalbaar, en ‘n verdere een persent deur die werknemer. (www.labour.gov.za)
  5. Werknemersbelasting: Indien enige van die werknemers van ‘n onderneming se vergoeding die perk in die Belastingwet oorskry, moet die onderneming as werkgewer vir LBS (lopende betaalstelsel) registreer. Die belasting moet maandeliks van sodanige werknemers se vergoeding afgetrek word en aan die SAID oorbetaal word tesame met die indiening van die nodige opgawes. Daar moet ook twee keer per jaar ‘n LBS-rekonsiliasie (IRP501) opgestel en by die SAID ingedien word. Jaarliks moet daar saam met die LBS-rekonsiliasie ook IRP5-sertifikate vir alle werknemers uitgemaak word. (www.sars.gov.za)
  6. Vaardigheidsontwikkelingsheffing: Indien die totale jaarlikse salarisrekening van die onderneming R500 000 oorskry, of indien die onderneming meer as 50 werknemers het, moet die onderneming ook vir die vaardigheidsontwikkelingsheffing (SDL) registreer, en moet daar ook maandeliks opgawes ingedien en die nodige heffing betaal word.
    (www.labour.gov.za / www.sars.gov.za)
  7. Vergoedingskommissaris: Enige onderneming wat werknemers in diens het, ongeag die vergoeding wat vir sodanige werknemers betaal word, moet as werkgewer vir ongevalleversekering by die Departement van Arbeid registreer. Die onderneming moet jaarliks ‘n opgawe by die departement indien en word dan aangeslaan teen ‘n persentasie van die totale salarisrekening van die onderneming. Werknemers wat aan diens beseer word, kan dan vergoeding van hierdie fonds eis. (www.labour.gov.za)
  8. Gelyke Indiensneming: ‘n Onderneming wat meer as 50 werknemers in diens het, of wat die gestelde drempel van jaarlikse omset vir die spesifieke sektor waarin dit handel dryf, oorskry, moet elke twee jaar ‘n gelyke indiensnemingsplan opstel en by die Departement van Arbeid indien. (www.labour.gov.za)

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.

Basic registrations and compliance for businesses

Delport_mayFor any business, conducting services in South Africa, it can be somewhat of a challenge to stay ahead of the game, regarding the registration and compliance as required by the law. This article serves as a summary concerned with for the most frequent registrations and compliance that applies to most businesses.

      1. Annual returns and annuities (Companies): Any company that wants to remain registered at the CIPC must submit a return of information to the CIPC annually, during the company’s anniversary month. It is also of utmost importance to pay the annual fee.
        (www.cipc.co.za)
      2. Income Tax: Any company that trades should be registered as either an individual / sole trader, company, trust, or any other person, as a taxpayer to the South African Revenue Service (SARS). Annually this company should complete and submit an income tax return (IT12 or IT14). Furthermore, a provisional tax should be calculated every six months and an IRP 6 return must be submitted, if necessary, any outstanding amount must be paid. Non-compliance can result in substantial penalties. (www.sars.gov.za)
      3. Value Added Tax (VAT): If the annual turnover of the company will exceed R1 million, the company must register for VAT. A voluntary registration can be done if the turnover exceed R50 000 per year. VAT returns should normally be submitted every two months and, if necessary, outstanding amount should be paid. (www.sars.gov.za)
      4. Unemployment insurance: If a company has employees, the company must register as an employer for unemployment insurance. Monthly returns for payment has to be submitted. An amount equal to one percent of the salaries of employees should be paid by the employer, and a further one percent by the employee. (www.labour.gov.za)
      5. Employees Tax: If any of the employees of a company’s remuneration exceeds the limit for the Income Tax, the company, as employer, should register for PAYE (Pay system). The tax must be deducted, monthly from these employees’ salaries, and paid to SARS. In addition to the payment, the necessary returns should also be filed. Company should reconcile a (IRP 501) biannually and submit it to SARS. In addition to the PAYE reconciliations, IRP 5 certificates should annually be accounted for all employees. (www.sars.gov.za)
      6. Skills Development: If the total annual wage bill of the company exceeds R500 000, or if the company has more than 50 employees, the company should also register CSL. Monthly returns should be and must also be submitted monthly returns and pay the necessary tax be. (www.labour.gov.za / www.sars.gov.za)
      7. Compensation: Any company that employs workers, regardless of the compensation paid for such employees, must register as an employer for accident insurance with the Department of Labour. The company must annually submit a return to the department after which they will be charged at a percentage of the total wage bill of the company. Employees, who are injured on the job, can claim compensation from this fund.
        (www.labour.gov.za)
      8. Equity: A business that employs more than 50 employees, or a business that exceed the proposed threshold of annual turnover for the specific sector in which it trades, should, biennially, draft an employment equity preparation at the Department of Labour.
        (www.labour.gov.za)

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.