There's a lot of admin, paperwork and costs that go into setting up and running a business.
If you don't follow the right process, the Companies and Intellectual Property Commission (CIPC) could reject your registration. And you'll have to start all over again.
To help you avoid delays in the registration process, our experts answer six of the most common company registration questions they received on the Accounting & Tax Club.
Take a look at their answers to register your company with ease and avoid delays.
Question 1: What type of company can I register?
Your six company registration questions answered
There are five types of entities you could register purchase or trade through.
A Sole Proprietor;
Close Corporation (CC); and
Please note that you can't register a new CC anymore but you can buy one from someone else if you want to trade as a CC. You'll have to deal with the CIPC when you do this.
We recommend you check out the Practical Tax Loose Leaf Service
to discover the pros and cons as well as the tax benefits of registering as the different entities.
ATTENTION FINANCIAL MANAGERS: 11 law changes that could land YOU in jail
There are 11 law changes from the Companies Act that directly affect financial managers. Do you know what they are?
Find out what your obligations are or you could personally face penalties of up to R1 million or up to ten years in jail.
Find out more here.
Question 2: Can I reserve my company name before I register it?
Under the old Companies Act
, you used to have to reserve your company's name before you registered it. But this is no longer the case. You can start the process of registering your company name without reserving it.
Check out this article
to find out why it's still best to reserve your company name.
Question 3: Can I register a company if I don't have a company name?
On its website, the CIPC explains that you can register a company with or without a company name and start trading.
If you register a company without a reserved name, its registration number automatically becomes the company name. If you want to change the name later on, you'll first have to reserve a name and then apply for a name change at the CIPC.
Question 4: How much does it cost to reserve a company name?
Each name reservation application costs R50.
If the CIPC doesn't approve your initial name reservation application, you have to apply for new names. You can apply for between one and four names during each application process.
Question 5: How much does it cost to register a company with the CIPC?
A company registration varies between R125 and R475, says the CIPC.
It's R125 for a private company, R475 for a non-profit company without members.
Question 6: Can I name my company any way I like?
There are rules of what you can and can't do when you name your company, says the Companies Act.
For example, your company name can't be the same as the name of:
A registered external company, close corporation or co-operative; or
A registered trademark.
If you name your company any way you like, the CIPC will reject your name when you register.
To be on the safe side, check out this article
as it contains six rules for naming a company you want to register.
We hope these answers have shed some light on company registration and that they'll make it easier for you to register your company and avoid delays.
PS: Company registration is complex. That's why we suggest you check out the Practical Tax Loose Leaf Service
. It covers company registration from A to Z.