14/04/2025
The question is not, should I register a company, but when? If you intend creating a serious business, with the associated risks, a (Pty) Ltd is the obvious choice, for many reasons. Most notably, a (Pty) Ltd is not you. It is a separate legal entity that will protect you personally from some of the risks inherent in business. And your potential customers will take you seriously because the company laws you are now subject to gives them confidence. Plus, it's cheap to register. For a few hundred Rand you can be Mars Bread Deliveries (Pty) Ltd overnight. Long before you have delivered a single loaf of bread to Mars. And everyone will think you are the bee's knees because you are the Managing Director of the great Mars Bread Deliveries. Tempting, right? But here's the catch. You might discover that it's a lot more difficult to deliver bread to Mars than you thought. And when Elon does get there, he might take a bread factory with him. So you might never deliver a loaf of bread to Mars. But while you are trying, here's what the registered (Pty) Ltd will be costing:
Two nil Provisional Tax returns each year: about R700 each
A Nil Tax Return annually: about R850 per return, or R200 every month in SARS Administrative Penalties for non-submission (R2400 per year)
A CIPC annual return: about R3 000
A Once off declaration of beneficial owners: about R3 000
And then, if you decided to stop trying to sell bread to Mars, add:
CIPC cost of de-registration: R2 500
SARS cost of de-registration: R2 500
So, by all means register a company, but maybe first sell a few loaves of bread. It costs nothing to do business as a sole proprietor, trading as (t/a) Mars Bread Deliveries. And when the bread starts blasting off to Mars, nothing stops you from registering the (Pty) Ltd and moving the entire business into the company. And maybe the entire company to Mars.