Sole Proprietor Question

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metalcore

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I have seen in many places that you can trade as a sole proprietor without having to register with Cipro.

As I understand it you only then pay tax on your income as a sole proprietor, unlike with a CC where you could end up paying tax on the company profit and personal tax on what you pay yourself as a salary or dividend.

The disadvantage of sole proprietorship is that full liability rests on you the sole proprietor, unlike with a CC where there is limited liability and the CC carries some of the liability because it is a juristic entity. Ok that much I know but... I got 3 questions:

1. Business name - What boggles me with regards to sole proprietorship is what happens with name registration? If I am a sole proprietor and I want to give myself a name for business and branding/marketing purposes, how do I go about making the name mine as a sole proprietor.

In otherwords if I just start using a name like "Fast Courier Services" (thats just an example if I was going to start a courier business) and I don't have to register because I'm trading as a sole proprietor, what is there to stop someone from going and registering the name with Cipro and leveraging my name once I have established myself. Does the sole proprietor have recourse in any way.

2. Banking details - As a sole proprietor do I have to use my own personal bank account? If so, some suppliers and clients expect a company account don't they? How can I convince these businesses that I want to make into cleints to take me seriously with a personal account? Are business and suppliers out there willing to deal with sole proprietors in this sense?

3. Trade accounts - Why is it that suppliers tend to prefer to register CC's as dealers. For example in the computer industry if you come as a sole proprietor some suppliers classify you as an end user and chase you away? What happened to encouraging entrepreneurship.
 
1. If you're worried about your 'brand' surely you trademark it?
2. While I was waiting for my Trust to be established I opened a Sole Prop Business Cheque account at FNB.
3.
 
bwana said:
1. If you're worried about your 'brand' surely you trademark it?
2. While I was waiting for my Trust to be established I opened a Sole Prop Business Cheque account at FNB.
3.
Click to expand...

Thanks. Is trademarking expensive. I didn't know you get sole prop businesses cheque accounts going to look into that.
 
2. You can open the bank account in the Businesses name, it doesn't have to be on your personal name.
3. There are many end users that register as dealers just to get better pricing, thats why most companies don't allow it, however thee are quite a few that do.
 
As a business consultant, im familiar wit ur askn..
1. Wen it comes 2 a business name, a sole trader doesnt hav a registered, it merely trades in the owners personal capacity. Working with your example, your business'z 'name' would be.
Metalcore van der Merwe t/a Fast Courier Services. The way confusion is cleared is via the 't/a' aspect. Trademarks can help you but I dont think its necessary and btw, you'd have to copyright the name, not trademark (used for marks e.g. logo).
Copyrights arent that expensive to register bt u g2 b patient bro.

2. The same happens for banking details. You'll open a new accnunt in the name Metalcore v/d Merwe t/a Fast Courier Service. You can then use 'Fast Courier Service' as the bank account holder or name to distribute to your clients and suppliers.

3. The trade account issue, as I have personaly cum to notice is really only in the Computer Reselling scene. I think they are merely trying to protect themselves against the man-on-street buyers.
In most other industries, they don't have such strict protocol.

Hope that helps
 
spykoss said:
As a business consultant, im familiar wit ur askn..
1. Wen it comes 2 a business name, a sole trader doesnt hav a registered, it merely trades in the owners personal capacity. Working with your example, your business'z 'name' would be.
Metalcore van der Merwe t/a Fast Courier Services. The way confusion is cleared is via the 't/a' aspect. Trademarks can help you but I dont think its necessary and btw, you'd have to copyright the name, not trademark (used for marks e.g. logo).
Copyrights arent that expensive to register bt u g2 b patient bro.

2. The same happens for banking details. You'll open a new accnunt in the name Metalcore v/d Merwe t/a Fast Courier Service. You can then use 'Fast Courier Service' as the bank account holder or name to distribute to your clients and suppliers.

3. The trade account issue, as I have personaly cum to notice is really only in the Computer Reselling scene. I think they are merely trying to protect themselves against the man-on-street buyers.
In most other industries, they don't have such strict protocol.

Hope that helps
Click to expand...

+1 for this advice
(and -1 for the spelling :cool: )
 
spykoss said:
Trademarks can help you but I dont think its necessary and btw, you'd have to copyright the name, not trademark (used for marks e.g. logo).
Copyrights arent that expensive to register bt u g2 b patient bro.
Click to expand...

A copyright exists by virtue of fulfilling the requirements for copyright - there is no requirement that it be registered nor is there any register of such.

A trade name would, by virtue of such use, become the method in which your goods/services are identified and therefore by the mark used to distinguish your goods from the rest.

Therefore my advice is to approach an intellectual property lawyer in order for you to attend to the registration of your trade name and any other names in which you might market your goods/services. Do not underestimate the immense value of a trademark.

There will be a cost attached to such registration as in all things in life but it would be the prudent thing to do and most practical as such is lodged with CIPRO and capable of easy proof in the event that someone trades under your marks name - whereas with copyright you would need to prove that you have satisfied the requirements of copyright and are therefore deserving protection.

In reply to your point 3 - I would suggest that as suppliers are dealing with a CC - there is an air of formality and legitimacy about the business to be conducted and therefore prefer dealing with CC/(Pty) Ltd's/Ltd's.

I hope this helps.
 
Last edited:
Good thread this. I'm a sole proprietor myself, and this information is invaluable (and hard to find) to those starting out (including myself).

I'm a SP providing a service (web dev), so suppliers are not an issue to me, hence starting out as a SP, not a CC. Does anyone have any links that can help us with tax returns (expenses as well as income)?
 
metalcore said:
I have seen in many places that you can trade as a sole proprietor without having to register with Cipro.

As I understand it you only then pay tax on your income as a sole proprietor, unlike with a CC where you could end up paying tax on the company profit and personal tax on what you pay yourself as a salary or dividend.
Click to expand...

Wrong. If you pay a salary out of the CC it is tax deductable, and will only be taxed in your name (the same then as a sole proprietor). But it is more flexible. If you don't need the money it can stay in the CC and you only pay 28% vs 40% marginal maximum tax rate as individual (depends on the individual obviously).

Alternatively, if you have a credit loan account, payments to yourself can be classified as "loan repayments" i.e. not tax deductible in the CC, but not taxed in your name.

Alternatively you can declare "dividends" - then not tax deductible in the CC i.e. you will pay tax at 28% in the CC an no income tax in your name. You will have to pay 10% STC though.

Point is there are a number of variable that influence the correct structuring. And the advantage of (to some extent) being sheltered from your creditors if you operate via a CC is invaluable.
 
Dear GOD as a business consultant i'd expect you to atleast have a professional manner and not type as if your are on bloody mxit. Sigh at people nowdays.

spykoss said:
As a business consultant, im familiar wit ur askn..
1. Wen it comes 2 a business name, a sole trader doesnt hav a registered, it merely trades in the owners personal capacity. Working with your example, your business'z 'name' would be.
Metalcore van der Merwe t/a Fast Courier Services. The way confusion is cleared is via the 't/a' aspect. Trademarks can help you but I dont think its necessary and btw, you'd have to copyright the name, not trademark (used for marks e.g. logo).
Copyrights arent that expensive to register bt u g2 b patient bro.

2. The same happens for banking details. You'll open a new accnunt in the name Metalcore v/d Merwe t/a Fast Courier Service. You can then use 'Fast Courier Service' as the bank account holder or name to distribute to your clients and suppliers.

3. The trade account issue, as I have personaly cum to notice is really only in the Computer Reselling scene. I think they are merely trying to protect themselves against the man-on-street buyers.
In most other industries, they don't have such strict protocol.

Hope that helps
Click to expand...
 
jsheed_sa said:
Dear GOD as a business consultant i'd expect you to atleast have a professional manner and not type as if your are on bloody mxit. Sigh at people nowdays.
Click to expand...

Biography seems accurate. "What a joke" indeed.
 
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