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Four important South African laws for new business to comply

Describe four South African laws that it will be important for you and your new business to comply with and explain specifically how these laws will affect you and/or your business.

When starting or running a small business, you need to be aware of the numerous laws that impact on your business. This guide introduces the various legal issues small businesses need to consider.
  1. Business Registration
  2. Licences and Permits
  3. Employment (Work Conditions, UIF, Occupation Health, Bargaining Councils, Skills Levies, HIV/Aids Policies)
  4. Taxes and Levies

Business Registration

  • Before you can register your business, you need to decide what type of entity would best suit your needs. Different entities have different legal structures and implications:
  • Sole Proprietorships / Sole Traders
  • Partnerships
  • Close Corporations
  • Private and Public Companies
  • Section 21 Companies (NPOs)
  • Co-operatives
Business name, close corporation and company registrations are handled by CIPRO. Visit the CIPRO website for detailed instructions on how to apply and register.

Licences and Permits

Depending on your business, you may need specific licences, such as a:
If you run a business that makes or sells food or provides health or entertainment services (for example businesses offering saunas, massages, snooker, billiards, slot machines, nightclubs, and cinemas), then you need to get a business licence from your local municipality. Get detailed information on getting a business licence or read a summary of the relevant legislation.

Employment


If you employ people in your business, then you need to adhere to a range of labour laws, including those regulating:
  • Basic Conditions of Employment
  • Unemployment Insurance
  • Occupational Health and Safety
  • Bargaining Councils
  • Skills Development
  • HIV/Aids Workplace Policies

Taxes and Levies

All businesses have to pay tax. The South African Revenue Service (SARS) has detailed information for small businesses on how to pay tax as well as information on the various tax incentives which are in place to encourage small business in South Africa. Visit the SARS website for more information, particularly look for the SARS SMME Frequently Asked Questions (in the About Us section) and the Tax Guide for Small Businesses 2005/2006.


Businesses are required to register with their Sector Education and Training Authority (SETA) for the Skills Development Levy. Read more about the Skills Development Levy or get instructions on how to register and how to get training on the Department of Labour's website.

All employees and their employers are required to make contributions to the Unemployment Insurance Fund. Get more information on unemployment insurance or visit the Department of Labour's website.

Khabza Mkhize

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