Opening Small Online Business

[Dolby]

Just out of interest, if I wanted to open a small online store selling something small like jars/bottles and register here >>> https://www.fnb.co.za/business-banking/cipc+bee/cipc.html for under R200.00 - are there other costs?

I heard something ridiculous like a mandatory yearly audit costing thousands - surely that's wrong?

 

[PPLdude]

What about keeping it as a sole proprietorship

 

[Dolby]

What about keeping it as a sole proprietorship

I could do that.

Does that need to be audited?

I've just heard that auditing costs a fortune

 

[Adrianax]

Just out of interest, if I wanted to open a small online store selling something small like jars/bottles and register here >>> https://www.fnb.co.za/business-banking/cipc+bee/cipc.html for under R200.00 - are there other costs?

I heard something ridiculous like a mandatory yearly audit costing thousands - surely that's wrong?

I agree with the other posts. Keep it a sole proprietorship.

A sole proprietorship does not need to be audited. But, then again you will not have a formal business and everything will be done in your own name.

But, yes, when you register a Pty(Ltd) you need to submit audited financials every year and pay their required fees.

 

[Batista]

Why not just use your own account until such time you have grown your business?

 

[Dolby]

Thanks guys ; looking at all avenues and just curious about options / to expand my knowledge

 

[Dolby]

But, yes, when you register a Pty(Ltd) you need to submit audited financials every year and pay their required fees.

What are their fees?
Could be the crazy fees I heard about ie thousands?

 

[SYNERGY]

You're personally liable for the business debts in a sole proprietorship.

 

[Alton Turner Blackwood]

Where did you see your company has to be audited? Having your company audited (the business you describe) would be voluntary. You don't have to. I have a bunch of PTY Ltd's and none of them are required to be audited.

 

[juBa]

^^ the only thing you’ll need to do is your provisional tax return etc if you want your company to be tax compliant (think I paid R600 for this - once a year).

 

[cupcake]

You're personally liable for the business debts in a sole proprietorship.

True, but you have to sign personal surety for most debt anyway so it's the same thing at the end of the day.

 

[cupcake]

Thanks guys ; looking at all avenues and just curious about options / to expand my knowledge

Don't spend money on formalities until you have a profitable business, it's pointless.

It is still important to keep good records you can use a free accounting system like Wave.

 

[silkenphoenixx]

My wife and I have a PTY for her consulting business, we have an accountant basically on retainer. He charges us in the neighbourhood of R1k for each tax return that he does for us. But he's good and trustworthy so I don't mind paying.

If you're in the Cape Town area, drop me a PM and I'll send you his contact details.

 

[RedViking]

Just out of interest, if I wanted to open a small online store selling something small like jars/bottles and register here >>> https://www.fnb.co.za/business-banking/cipc+bee/cipc.html for under R200.00 - are there other costs?

I heard something ridiculous like a mandatory yearly audit costing thousands - surely that's wrong?

I would just maybe register a business name and get a website. Start the home business and just pay Provisional TAX. If you see your business growing, then take it to the next level. For all you know people have no interest in jars/bottles, so maybe first see if it works before you spend unnecessary money.

 

[silkenphoenixx]

For all you know people have no interest in jars/bottles, so maybe first see if it works before you spend unnecessary money.

The nice thing about registering a PTY is that you don't have to delimit your business activities - if you start off selling bottles and jars, and see there's no profit, then you can switch to some other business activity with the same PTY. You can probably even use the losses incurred by the first attempt to reduce any tax you may pay on your profits with the second attempt, your accountant would be able to assist there.

Do be careful of course to separate your business finances and your personal finances. Again, look to your accountant for guidelines on how to draw an income for yourself from the business once it starts to be profitable.

Best of luck.

 

[RedViking]

The nice thing about registering a PTY is that you don't have to delimit your business activities - if you start off selling bottles and jars, and see there's no profit, then you can switch to some other business activity with the same PTY. You can probably even use the losses incurred by the first attempt to reduce any tax you may pay on your profits with the second attempt, your accountant would be able to assist there.

Do be careful of course to separate your business finances and your personal finances. Again, look to your accountant for guidelines on how to draw an income for yourself from the business once it starts to be profitable.

Best of luck.

Good advice. Don't mix business with personal. Even as a Freelancer I have a separate account where all my Freelance money goes into, pay all bills related to the Freelancing, and then send the rest to my income account. Makes managing tax also easier.

 

[Charly]

^^ the only thing you’ll need to do is your provisional tax return etc if you want your company to be tax compliant (think I paid R600 for this - once a year).

Could you please send the details of the people you used to do it for you?

I suppose it's a bad idea to not be tax compliant even for a pty ltd which I'm currently not using?

 

[silkenphoenixx]

I suppose it's a bad idea to not be tax compliant even for a pty ltd which I'm currently not using?

It is a bad idea, you need to pay taxes either way, whether you register a PTY or not. The formal method for doing so is just different in each case.

 

[Charly]

It is a bad idea, you need to pay taxes either way, whether you register a PTY or not. The formal method for doing so is just different in each case.

I understand that. I'm just wondering because it's had no revenue this financial year so I thought that might change things?

 

[silkenphoenixx]

I understand that. I'm just wondering because it's had no revenue this financial year so I thought that might change things?

Technically you would still need to do a return, I think. I stand under correction. You just would declare no revenue, and hence not have to pay any tax.