New to company compliance? Don’t believe these four myths

Online since 22.03.2018 • Filed under Corporate Governance • From Issue 7 - March to August 2018 page(s) 31
New to company compliance? Don’t believe these four myths

Getting your company compliance documents in order for the first time can be a confusing and exhaustive task. Here are four myths you shouldn’t believe.

If you want to skip unnecessary red tape and avoid hefty fines from SARS or the Department of Labour, it’s vital to tick all the boxes from the get-go.

Unfortunately, because of limited compliance knowhow when you’re starting out, and grey areas and common misconceptions doing the rounds, first-timers are often thrown off track. According to Ilana Steyn, MD of Company Partners, most start-ups make the following four inaccurate assumptions about compliance documentation:

CIPC registration

Simply registering your company name at CIPC does not protect it. The only way to protect your brand name under SA’s Trade Marks Act is to do a Trade Mark registration at CIPC.

It’s possible to defend your brand name without the additional Trade Mark registration, but this leaves you fending for your brand using common law, which is a challenge in a court of law.

Directors and shareholders

A director can be a shareholder, but it’s not an automatic association; it’s two separate titles. Shareholders are the legal owners of company shares, while directors simply head up the company’s management. It’s important not to skimp on the formalities because it’s your company’s responsibility to issue share certificates to every shareholder as proof of ownership.

The CIPC does not issue the share certificates upon your company’s initial registration. You only stipulate how many shares will be available for distribution within your company during the registration process. It’s also a good idea to create a legal shareholder’s agreement when there’s more than one shareholder.

B-BBEE (BEE) affidavit

The good news is that if your business’s turnover of less than R10 million a year you don’t need a B-BBEE certificate. You simply need a B-BBEE affidavit. Your business is considered an Exempted Micro Enterprise (EME), which means you need to complete the affidavit to state whether you have 100% black ownership, more than 50% black ownership, or less than 50% black ownership in your company.

If you have 100% black ownership, your company receives Level 1 B-BBEE status; more than 50% black ownership earns you Level 2; and less than 50% gives you a Level 4.

Once your affidavit is stamped by a Commissioner of Oathes it serves as your legal B-BBEE certificate. When your company hits the R10 million mark, you need to apply for a B-BBEE certificate.

PAYE, UIF and COID

According to South African law, all registered companies should comply with annual, bi-annual and monthly PAYE, UIF and SDL requirements. If you employ someone, you should be registered as an employer at both SARS (for PAYE and SDL) and the Department of Labour (for UIF).

For more information, visit www.ptycompanyregistration.co.za

Issue 7 - March to August 2018

Issue 7 - March to August 2018

This article was featured on page 31 of SABI Magazine Issue 7 - March to August 2018 .

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