Sole proprietor tax is an issue which raises its head when you personally run a business with a trade name and not through a company or corporation.
So, as a sole proprietor, you are Joe Black t/a Better Photo Agency, for example. That is, your business is Better Photo Agency and you are the only owner. A CC or a company does not feature in this set-up. Your letterhead typically has “Better Photo Agency” in big at the top and “Sole proprietor: J Black” in small at the bottom. No registration number is displayed, even if “Better Photo Agency” has been registered as a defensive name.
If you as an individual are registered for tax with SARS, then there is no need to register your sole proprietor business for tax as it is not a separate legal entity and cannot be registered for tax as such. You are the business and the business is you, as it were, and your business trading figures are reported to SARS as your own personal figures.
If you do not have a personal tax number then you will need to apply for one and that number is used when reporting your personal and business income.
Need to buy a shelf Pty?
Our pre-registered (shelf) Pty Ltd companies are clean – they have been specifically registered for our clients to take over and use – they obviously have not been traded with before.
Acquiring a shelf Pty allows you to get a name and number for your business within about 1 hour. The final change of directors, etc takes about another 3 weeks to do properly.
For more on Shelf Pty’s, please email us here:
Or visit our secure site to read more and order a Shelf Pty from us.
Resigning as a member of a CC might be necessary when you wish to sell your interest (percentage) in the CC to the remaining member/s or to a new owner. It might also be needed if you simply wish to disassociate yourself with the existing business or other member/s.
If you wish to resign merely to get out of the CC, make sure that the remaining members relieve you of suretyships, etc, in writing before you sign the resignation document we would send you. Also make sure your loan account (if any) in the CC is paid back to you or taken over by another member. If the loan is in negative (you owe the CC money) you will need to pay it back or get another member to give you a signed letter stating that he/she takes it over from you.
If you’re selling your interest and resigning from the CC, make sure you get your money (or at least the first major payment) before you sign out. It’s probably a good idea to get your lawyer to draw up an agreement between you and the buyer, but you may come to us for preparing and processing the resignation papers.
For more on this, kindly email us at:
On the subject of conversion of CC to Pty Ltd with a property, the concern of many is what happens to the property and how the conversion affects its ownership and legal standing.
When a CC is converted into a Pty, all of the assets and liabilities of the CC automatically become that of the Pty.
For items like fixed property, although the ownership automatically legally subsists in the Pty after conversion, you will need to supply proof of the conversion to the deeds office and mortgagor so that they can update their register/records with the new company name (if changed) and number. This process should not cost you anything.
Call your estate agent, lawyer or the deeds office to confirm that the above is currently still the procedure, then, if happy with the result, please consider applying through us to do your conversion.
You probably know that under the new Companies Act 2008, CC’s (Close Corporations) can no longer be registered in South Africa.
This does not affect the about 1,500,000 CC’s already registered in South Africa (far more than Pty Ltd companies). If you already have a CC, you may keep it, retain your assets/property in it and run your business through it. You may change its name, members, accounting officer and other details, or you may sell the CC to someone else or convert it into a Pty Ltd company.
The way we see it, there should be no mad rush to change your CC into a Pty Ltd company unless:
- You prefer your business to look like a “(Pty) Ltd” company and not a “CC”
- You prefer the legislation for the new Pty as against the old CC legislation (which incidentally has been somewhat revamped)
- You are tired of putting the owners of the CC under “Members:” on your letterhead
- You’d prefer to list the “Directors:” on the letterhead and not the owners/ shareholders of the company which include parties (people, companies or trusts) who are not directors.
For more, email us on:
Would you like to buy a Shelf CC in South Africa?
Yes? Great! You’ve come to the right place!
There is only one problem: CC’s cannot be registered any longer in SA.
So most people purchase a Shelf Company – read more…
There are a few old Shelf CC’s floating around the marketplace and we literally only have one left – for more on this, email us at:
Sole proprietor literally means “the only owner”.
A person, a company or a trust can be the proprietor of a business. For example, a company ABC Elastics (Pty) Ltd runs a business called Special Elastic Suppliers. It trades with that name and is is the owner of that business, so it can be termed the proprietor of the business, even the “sole proprietor” of that business.
But usually when we use the term “sole proprietor” we are referring to an individual human (not a company) who owns/runs a business.
In order to establish your Sole Proprietorship in South Africa, kindly follow the following procedure:
- Trade Name Registration – apply to register your t/a (trading as) name
- Tax Registration – apply for an income tax number for yourself (if you do not have one; this same tax number is used for the business because you are/own the business)
Other registrations for your sole proprietorship include:
- VAT Application – register your business for Value-Added Tax (if needed or if 12-month turnover is R1m or more)
- Annual Work – annual financial statements and tax return – after your first period of trading ending 28 February.
Please feel free to send us a message should you have any question: Send Message