Open letter by Graeme Scott
Dear Business Owner or Potential Business Owner,
A business starts with a hope, a dream and an idea. Then the hard work starts.
In South Africa Small business works within a highly regulated framework.
The good is that if you meet all the requirements, then issues like finance and the legal framework, become a much smaller part of the
entrepreneur's already hectic day.
The bad is that if you do not meet all the requirements - you will be job hunting soon.
Then the ugly - who to go to for advice on the structures and registrations of your business?
According to much more pedantic people than myself, there is a shortage of 30 000 accountants in our beautiful country. What does this mean? The good accountants get swamped and the bad eggs pop up like mushrooms all over the place.
The solution - make sure that your accountant has a strong financial management background and do not hesitate to ask for a professional
Now back to registrations and formalising your business's
- Build a business you can sell. This means that you need to register your business in a separate entity from yourself. Something like the now defunct Close Corporation.
- Register this entity for Income Tax.
- Is your business going to do more than R1m turnover per annum? Then you need to register for Value Added Tax.
- Are you employing anyone? Then remember to register for:
-Workmen's Compensation at the Department of Labour
-PAYE/SDL/UIF at SARS
You will always need the following when registering for any of the above:
- Get advice! Registrations are more complicated than they appear and a mistake or a misunderstanding here will be much more expensive than a good accountant.
- Get a municipal account registered in your business name OR have a copy of your lease agreement in the business name -all registrations require a positive proof of address.
- Get ORIGINAL letters from your bank as proof of your business bank account.
- Make sure you have very CLEAR copies of your Identity Document.
For good, honest and value for money advice - have a look at www.bachaccountants.co.za and contact us to get your business off to the right start!