There are four types of companies you can register in South Africa:

1. Private Company

2. Public Company

3. Sole Proprietorship

4. Non-Profit Company

Private companies are created by small to medium-sized businesses. People who start a private company fall into one of the following:

• Entrepreneurs

• Freelancers

• Contractors

• Family Business

• Fundraising

The owners and shareholders are not liable for the company’s debt. It is less risky as it protects shareholders’ personal assets if there is outstanding debt owed from loans.

Most businesses would rather deal with private companies than a Sole Proprietorship. Private companies comprise a business office with employees. It makes it look more professional and trustworthy.

Private companies are more eligible to receive loans from banks and investors. Private companies have a higher chance of obtaining loans than a Sole Proprietorship. It allows a business to grow quickly.

A Sole Proprietorship has one owner, while a private company can have up to 50 owners. It’s easier to attract investors for a private company than for a Sole Proprietorship.

If one of the partners or owners passes away, the company will continue to trade. The business lifespan does not rely on the owner’s lifetime; it makes the company more stable.

Adding new owners to the business or selling shares is a simple process. Transferring ownership does not affect the business flow and encourages new investors to take an interest.

Public companies are created by large and established businesses that target national and international markets. People who start a private company fall into one of the following:

• Private companies looking to expand

• Wealthy businessmen

• Venture Capitalists

• Institutional investors

• State-Owned Enterprises

Companies can list their shares on the Johannesburg Stock Exchange to raise large amounts of funding for their company.

Public companies grow much quicker than private companies, with funding opportunities and a broad market.

Public companies are more trusted by banks, investors, and governments. They can attract big players in the market.

There is no limitation on how many people can own shares, unlike private companies, which are limited to 50.

Public companies are more established and have more opportunities to apply for government tenders.

If several owners of the public company pass away, the company will continue to operate.

A sole proprietor is a person who takes full responsibility for the business operation. They do all the work, make all the decisions, and are personally held accountable for loans and paying employees. People who start a sole proprietorship fall into one of the following:

• Freelancers

• Entrepreneurs

• People with little capital

• People experimenting with a business idea

• People who work alone

There is less paperwork required to become a sole proprietor, as you register with SARS. You don’t have to submit paperwork to the CIPC. (Companies and Intellectual Property Commission)

Many sole proprietors do the accounting themselves as they must submit income taxes (only) and not company tax.

You don’t have to apply at CIPC and wait for approval; you can start the business quickly than a private or public company.

Non-profit companies aim at solving problems for groups of people or communities without making a profit. The main purpose of a non-profit company is to help others and give back to the community. People who start a sole proprietorship fall into one of the following:

• Religious people

• Entrepreneurs

• Cultural groups

• Community helpers

• Activists

Non-profit organizations can receive hefty donations and grants from the Government and Sponsorship deals from popular brands. This is very difficult for normal businesses to obtain.

There are major tax benefits with Non-Profit organizations. Businesses that donate money receive tax-deductible certificates. Non-profit companies do not pay income tax if they apply for PBO (Public Benefit Organization).

The non-profit organization does not make profits, but people must be paid for their efforts. Non-profit organizations do not financially benefit the directors; however, they do receive salaries.

You will be required to submit specific documents when you apply to register a company in South Africa. You can either do it yourself, or you can hire a professional company such as Nyiko Digital for business registration Depending on the type of company, you may be required to provide legal documentation, which may require legal expertise.

Private companies require the following documents:

• Directors’ ID certified documents

• Director’s proof of residence

• CoR14.1 Documents

(business name, business type, business address, financial year end)

• CoR14.1A Documents

(directors’ names, directors’ ID numbers, directors’ contact details)

• CoR15.1A Documents

(Shareholder rights, director rules, company policies, business decisions)

• Company Name

(Check availability)

Public companies require the following documents:

• Directors’ ID certified documents

• Director’s proof of residence

• CoR14.1 Documents

(business name, business type, business address, financial year end)

• CoR14.1A Documents

(directors’ names, directors’ ID numbers, directors’ contact details)

• Company Name

(Check availability)

• Custom MOI

(the company creates its own rules)

• Prospectus

(Will the shares be public)

A Sole Proprietor requires the following documents:

• ID Documents of the sole owner

• Register for income and provisional tax with SARS.

Non-profit organizations require the following documents:

• Directors’ ID certified documents

• Registered business address

• CoR14.1 Documents

(business name, business type, business address, financial year end)

• CoR14.1A Documents

(directors’ names, directors’ ID numbers, directors’ contact details)

• CoR15.1C Documents

(MOI, custom set rules for the organization)

• Company Name

(Check availability)

• Statement of purpose

The time it takes to register a business in South Africa depends on the type of business. Here are the following time estimates it takes to register your company after submitting the necessary paperwork:

1- 5 days

1- 4 weeks

1- 2 days

5- 10 days

• Registering Tax with SARS

• Accounting and Bookkeeping

• UIF, COID, PAYE registration

• Trademark costs

• Intellectual property protection

• Legal fees