Starting a business? To make things official, you'll need to register it with the Companies and Intellectual Property Commission
CIPC what what?
Glad you asked! While CIPC registration is not mandatory, it can benefit you and your business in a number of ways.
What’s more, if you want to do business with the government and the formal sector, or if you want to access forms of government support, CIPC registration is required.
Before we get into what CIPC registration entails, we need to cover the basics:
The majority of South African SMEs trade as either a Sole Proprietorship (an unregistered business), or a Private Company (a registered business).
The pros and cons of CIPC registration
While there are pros and cons of each, businesses who trade as a registered company (also known as a Pty Ltd.) automatically benefit from three major perks:
You qualify for external funding
You can claim certain business expenses back
You can sell your Pty Ltd.
If CIPC registration doesn’t sound like your cup of Joco (meaning that you opt to trade as a Sole Proprietorship) bear the following in mind:
You, and only you, are responsible for all financial risks involved in running your business
You can’t apply for a business or government loan (No biggie - Yoco Capital allows any type of business to get funding - cause we’re cool like that)
You cannot sell your business. Meh
When you kick the bucket, so does your business.
Okay, I want to register. Now what?
If you do decide to go ahead with registering your company, here’s what you need to know:
CIPC registration is fairly straightforward, and can all be done online on the CIPC’s online portal, and you can expect to pay around R125*
There’s a fair bit of admin involved
You will be required to compile and submit annual returns (not to be confused with annual income tax returns)
Tax returns are slightly more complicated
And that’s the tea! Read more about the ins and outs of CIPC registration here.