The biggest risk for this structure is that if the business fails, your creditors can recover the debt from assets belonging directly to you. So in summary this structure means you are the business and no new entity is created. A partnership represents a number of people coming together, between 2 and 20 and contractually agreeing to operate a business together.
They further agree to split any profits as per their agreement and in proportion to their interests. In establishing a partnership each partner needs to make a contribution to it and as per a sole proprietorship the partnership is not a separate legal entity, leaving partners generally liable for debts. Also known as a Pty Ltd.
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This is the most popular structure for entrepreneurs in South Africa. Essentially a company represents a new legal entity which is created and separate liability from the individual owner.
It will have the owners shareholders which may be one or more persons who own the company and the managers directors who run the company, which may be the same people. These companies are registered with the CIPC, and each year an annual return must be submitted to them to verify that the company is still trading. Smaller companies will require an annual accounting review undertaken by an accountant. Whatever your structure you need to be aware that the Government will still require you to register your business, register for income tax, VAT, UIF, COID, PAYE and to apply for certain licenses depending on your industry, your size and whether you are employing staff.
If you're setting up a private company Pty Ltd , you need to register your company as a legal entity. All the information you require can be found on the CIPC website www. Whether you're running a sole proprietorship, a partnership or a private company, you have to be registered with SARS. Sole proprietors or partners need to register as provisional tax payers directly. When you start a business, you will be required to register within 60 days of starting a business for an income tax reference number by completing a IT77 form, either at any SARS office or online.
If your turnover is or is expected to fall within the R1 million a year or more range, you will need to register as a VAT Value Added Tax vendor. If your business intends to employ one or more staff members who earn over R40, per year, you have to register your company for PAYE Pay As You Earn tax contributions. Read more about risk management. Learn more about managing risk when starting up.
Privacy and information Safeguard your customers privacy by complying with state and national privacy laws. Read more about privacy and information management. Contracts Contract law is complex. Your solicitor can develop standard agreements for your business to reduce confusion and costs. All parties must have the legal capacity to enter into a contract. A contract of sale involves an exchange of goods, services, or property from the seller to the buyer for an agreed amount.
It refers to a specific type of legal contract.
You have a duty of care to the health and safety of your staff, customers and the general public as per the Work Health and Safety Act You also have a responsibility to address environmental issues. Learn more about the environment and your business. Health, safety and environment issues include workers' compensation , food handling and safety , safety related to construction sites, ergonomic requirements and security issues.
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Learn more about keeping your workplace safe. Legal requirements checklist Before you start your business, seek legal advice from your solicitor and other specialist advisers. Review your legal requirements on a regular basis. Your business may change over the years, and so may legislation.
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Also consider Free legal advice for small businesses and people thinking about starting a business is available through Bond University's Bond Law Clinic. Read more about paying transfer stamp duty when acquiring a business. Find out about business requirements under trade measurement laws.
1. Register a Business Name
Read more about industrial relations , including minimum wages, awards and agreements. IPS Legal Group can help you determine the best structure for your company and prepare and review all necessary documentation to properly establish your business within state and federal legal requirements. In addition to preparing and filing all necessary business documentation, we will use our vast experience in intellectual property law to register and trademark your company name and brand, helping to ensure that your business interests are protected from the start.
Different states have different requirements for business formation. There are also different levels of liability and different tax treatments. IPS Legal Group has years of experience in assisting clients with the business formation process.
Contracts are the core of any business or commercial transaction. IPS Legal Group understands the tactical and strategic measures that must be taken internally to avoid external litigation and grow a profitable organization. We work proactively with clients to identify and manage risks, conduct negotiations, and ultimately draft agreements that provide certainty, predictability, and consistency in any business transaction. No matter what type of contract you require, IPS Legal Group can help prepare the right agreement that supports your business. A good shareholder agreement is the most significant building block on which to found the business.