Register micro business vs PTY LTD

[Zarkon]

I'm looking to start something small in the future so just throwing the question out there.

Vat register
Less than R1million turnover
Only employee(Owner)

Anyone that runs a micro business and chose to be micro over pty. I see so many small companies that could have been a micro business but chose PTY.

The tax advantages is obviously better than choosing PTY,so why do some people not choose a micro business instead.

Strictly speaking of small companies,where the owner does everything.

 

[Thor]

/subscribes also wondering about this.

 

[AchmatK]

Pty refers to the legal status of the business entity.

Micro business or Small Business Corporation refers to the tax treatment of the entity and can be a Pty, cc cooperative or sole prop.

Refer to the guide from SARS for further details http://www.sars.gov.za/AllDocs/Lega...-IN-2012-09 - Small Business Corporations.pdf

 

[SACE]

"Signates" is correct.

Any PTY(LTD) company can apply to be a MICRO Company in terms of/for the TAX TREATMENT.

For more information on company registration you can also visit CIPC.co.za

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All companies in South Africa needs to be registered in terms of the Companies Act, 71 of 2008

If you want to start your own business and you want partners or shareholders to help you fund your new business you basically have three options.

Option 1. Start a partnership – also called a Personal Liability Company (Inc) with partners who has enough cash to invest in the business.

Option 2. Register a Private Company [(Pty) Ltd] with partners (directors and shareholders) who share your ideas and who has money to invest in your venture in return for a slice of your profits.[A private company trades for profit. It may not offer its shares to the public and the transferability of its securities is restricted. It may be incorporated by one or more persons.]

Option 3. Start (register) a Public Company (LTD) and issue shares to the public for a share of the profits and payment in dividends. [This is a company that operates for profit. It is allowed to offer its shares to the public. All listed companies must be public companies but not all public companies are listed on a stock exchange. It may be incorporated by one or more persons.]

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YOU MAY ALSO WANT TO KNOW:

Persons who do not qualify as micro businesses are:

A person does not qualify as a micro business for any particular year of assessment if, at any time during that year of assessment, that person holds any shares or has any interest in the equity of a another company

This prohibition accordingly applies to a company, a partner in a partnership or a sole proprietor.

While a person (natural person, partner in a partnership or a company) will not qualify as a micro business IF the person holds shares in a company, there are certain permissible shareholdings or interests that the person may hold.

See "signates" PDF link above for more details on this.

*Good Luck!

 

[Zarkon]

Ok i did not know that PTY(LTD) can register as Micro for tax reasons afterwards.

I thought there was a option on cipc that you can select small business,but you only get PTY(LTD) option.

You have to register PTY(LTD)then register at sars as a micro business afterwards for the tax.

For small companies or someone that wants to leave sole proprieter for a small business. You should register as micro
business then register for turnover.

Turnover tax < R335000 then you don't pay any tax.

Turnover tax helps the small business especially in your first year or two when you are not making a lot of profit.