Small Business start up.

[goga]

Even if you are not legally required to register for VAT, you may want to do so anyway. Depending on your market, suppliers who aren't register for VAT may be perceived as less legitimate. Also, if you expect to grow your business and exceed the compulsory VAT registration threshold in the future, then it may be easier familiarising yourself with VAT administration now instead of trying to figure all of it out at the last minute with SARS breathing down your neck.

Agree with Greig on the perception of a supplier who IS registered for VAT.
However, don't waste your time trying to register with SARS until you have at least R50k of turnover invoiced out and movement on your bank statements. They require R50k turnover as a minimum before they will register your PTY for VAT (not sure if this has changed with single reg, but was the case till recently given the high rate of VAT fraud in SA).

So, reg company, get trading, get to R50k of invoiced turnover, then weigh up pros and cons of whether VAT is worth it for your particular business and client base and make your move.

 

[goga]

Mila, the company reg process is easy once you've done it once. But for the first time, its a bit of a pain with the back and forth.
Reg the company first, and start speaking to your bank for balance of requirements while the co reg is being processed.
Have a read through:
http://mydl.itweb.co.za/index.php?o...register-a-company-online-not.html&Itemid=206

That outline of the process is pretty helpful, even if the Rand value rates may have changed slightly.

You don't need a power of attorney I think - if you're doing the registration yourself using your own customer code on CIPC, with you being the director shareholder - customer and director / shareholder are the same so don't think they power of attorney is req.
Usually required if you're using a company or bank to do the reg. - if you are they usually provide you with a simple one pager to sign which is a LIMITED power of attorney permitting them to act on your behalf to reg the co. I used quickcc.co.za a few years back and they provided it.

Last few reg's though I've done myself - cheaper and easy once you have it figured out.
Read the link further up as I find that it pretty much covers the process.

 

[Mila]

Thank you so much for all the info.

 

[Mila]

As I understand it I do not have to be audited. But Do I have to appoint an auditor in the registration process?

 

[creeper]

As I understand it I do not have to be audited. But Do I have to appoint an auditor in the registration process?

Yes. 'lesser' companies only need a review. Normally done by a CA.

 

[Chevron]

Yes. 'lesser' companies only need a review. Normally done by a CA.

But the second part of his question:

Do I have to appoint an auditor in the registration process?

 

[Alton Turner Blackwood]

I don't have an auditor and I don't even know what review is, and I have a few companies of which the youngest is two years.

The new companies act takes 90% of all the red tape away, things aren't like they used to be ten years ago where you have to submit dozens of documents just so you can have a PTY LTD

 

[creeper]

To my understanding. Yes. You need to appoint an auditor. But it doesn't have to be one of the big 4. There are quite a few small accounting companies that can do it.

 

[Mila]

To my understanding. Yes. You need to appoint an auditor. But it doesn't have to be one of the big 4. There are quite a few small accounting companies that can do it.

Thank you.

This is why I was advised to buy a shelf CC. No Auditor needed. Just an accountant.
So now I have to find someone pay them to do nothing?

 

[Mila]

You would think they would explain it a bit better.

// sigh

This is almost as frustrating as going to the labor offices to claim UIF

 

[czc]

Thank you.

This is why I was advised to buy a shelf CC. No Auditor needed. Just an accountant.
So now I have to find someone pay them to do nothing?

Just pay them per hour when you need them surely.

 

[Mila]

Just pay them per hour when you need them surely.

Do they have to know that I appoint them?

( serious Question. )

I can say bubble gum auditors. Never need them and once I do I can just change to someone else or use them.

 

[Greig Whitton]

The appointment and registration of auditors is covered under Chapter 3 of the Companies Act. However, per Section 34(2) of the Act, private companies do not need to comply with Chapter 3 unless their Memorandum of Incorporation stipulates otherwise.

So, no, you do not need to appoint or register an auditor.

 

[Alton Turner Blackwood]

The appointment and registration of auditors is covered under Chapter 3 of the Companies Act. However, per Section 34(2) of the Act, private companies do not need to comply with Chapter 3 unless their Memorandum of Incorporation stipulates otherwise.

So, no, you do not need to appoint or register an auditor.

I don't think they paid attention to my post

 

[Mila]

The appointment and registration of auditors is covered under Chapter 3 of the Companies Act. However, per Section 34(2) of the Act, private companies do not need to comply with Chapter 3 unless their Memorandum of Incorporation stipulates otherwise.

So, no, you do not need to appoint or register an auditor.

I don't think they paid attention to my post

No I did pay attention. It's just so much information my little scattered brain has to take it step by step.

I understand that I will not need an auditor, but when you follow the cipc instructions you have to appoint an auditor. And if you do not appoint one with registration you have to do it within 40 days after registration. They do not give you other options. And then I get a bit apprehensive. As I don't want to not do things and have to pay fines.

Sorry. I really appreciate the help. And I do read all the posts.

I'm using this as my guide.
http://youtu.be/zCQkI5ZQwXg

 

[Mila]

The appointment and registration of auditors is covered under Chapter 3 of the Companies Act. However, per Section 34(2) of the Act, private companies do not need to comply with Chapter 3 unless their Memorandum of Incorporation stipulates otherwise.

So, no, you do not need to appoint or register an auditor.

Thank you. So much.

 

[goga]

Thank you. So much.

+1
No auditor needed for private company anymore.
Not even a review is needed.

It all depends on a scoring system of sorts, value of turnover, number of employees, number of shareholders, etc - ie: how high is public interest in the business and how impt is it to be audited.

For your small business setup, reg it with the default memorandum of incorp which CIPC provides as part of the reg process - no audit needed, no review needed and no appointment of any of us CA cronies needed.

 

[Greig Whitton]

+1
No auditor needed for private company anymore.
Not even a review is needed.

It all depends on a scoring system of sorts, value of turnover, number of employees, number of shareholders, etc - ie: how high is public interest in the business and how impt is it to be audited.

Private companies are only exempt from an independent financial review if all of the owners are also directors. The scoring system that you described only applies to mandatory audits (i.e. a company may be exempt from being audited because it does not meet the requirements of the scoring system, but it would not be exempt from an independent financial review unless it was a private company AND if all of the owners are directors).

Bottom line: most small, owner-run or family-run companies will be exempt from audits as well as independent financial reviews. However, if you have "silent partners" (i.e. non-director shareholders), then the independent financial review will probably apply.

By the way, unless you are running a tiny one-man business, it is often a good idea to organise an independent financial review anyway. I work with a lot of small business owners who don't have much business financial literacy, and having someone explain the practical implications of an unhealthy balance sheet or cash flow statement can be invaluable.

 

[Mila]

Thank you. I now have to post my papers.
Or should I hand it in personally?

 

[Greig Whitton]

Personally, I would submit it manually to avoid the possibility of it getting "lost in the post".