The benefits of CIPC registration
Is it worth it for your small business in South Africa? - 8 December 2022
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It may seem a daunting step to register your small business, but it could be a wise decision.
As a small business entrepreneur, registration is the way to protect your very own brand; otherwise, anyone can claim it. This also applies to your website address. In addition, if something does affect your business, your personal finances are safe. Perhaps you’re looking for some more details?
We had a great chat with Anne, a director of MWRK Accountants and Auditors. She pointed out the advantages of CIPC registration
When is it worth it for a small business to register its business with CIPC?
This is a personal decision, and there is no quick answer to this. A registered company is a separate legal entity with its own tax number and operating in its own right. Some businesses register a company from when they start out, as this provides a clear identity to clients of the type of business activity.”
Does it matter what name I use to register your small business with CIPC?
It is preferable to register a name which best describes your business.”
How do I check if a company is registered with CIPC?
You can do a name search via the Bizportal website.”
Can I register a company online for free with CIPC?
No, there is a cost of R175.”
What happens if I don't register my company?
If you don’t register a company, you will operate as a sole trader or out of a partnership.”
Read on further about the advantages of registering your small business with the CIPC. But, first, we need to explain some of the jargon used.
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What is CIPC?
CIPC refers to the Companies and Intellectual Property Commission, the registering body for all companies registered in South Africa.
Being a sole proprietor
When your business starts bringing in income, SARS considers your business to be a sole proprietor. This is the simplest type of business. You’ll run your business under your own name and complete personal tax returns.
If you have doubts about registering your small business, here are some compelling reasons.
Extra funding and business
If your small business needs to have a business loan from a bank, you will have to first be officially registered with CIPC. This is because financiers want to see you mean business when you present them with your registered company.
The professional touch
Your registered business looks cool and professional, and you want to come across that way too. Being a business owner gives you the confidence to become a successful entrepreneur. After all, it’s not just any business.
You need the money to get going
Having a registered business allows you to benefit from business opportunities. Need a sudden injection of cash? You may need to quickly order a lot of stock to clinch that deal, or you may want to renovate your store. Well, to qualify, your business must be officially registered.
What about investors?
Some businesses may be most impressed with your business performance and would like to invest. But they might not be interested if your business is not registered.
Your registered business is a separate financial unit
This means that your business finances are separate from your personal finances. This is good news because no one should be able to take any of your personal assets to repay any debts incurred by your business. You cannot be held answerable to anyone for those debts.
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Source:
The Basics of How to Register a Small Business in South Africa
MWRK Accountants and Auditors
