You probably have some questions about how, why and when to make the move to register your business. Look no further! In this article, we aim to answer most of those burning questions, if not all, to make the process a little easier. Shall we get right into it?
First things first, a quick recap of what we’ve covered so far.
- How to Start a Business in 3 Steps
- Finding the Right Business Idea in 7 Easy Steps
- Testing Your Business Idea (+FREE Market Research Template)
- How to Write a Successful Business Plan
- 10 Do’s and Don’ts of Finding the Best Business Name Ideas
If you’ve gone through all these steps and are now thinking: “Is registering my business the smart move?” The short answer is yes. Here’s the perception some of us may have – registering a business is an expensive and tedious process that involves long queues for endless hours. But thankfully, you’ll be glad to know that’s not the case.
Registering your business has become so easy that you don’t even have to leave your house, let alone your couch. Like most things these days, you can do it online, and you can DIY it too! How much does it cost to register a business? Is it expensive? It may come as a surprise that it’s actually very affordable. It’s a once-off fee between R125 – R475, solely dependent on the business you’re registering.
But first, what happens if your business isn’t registered?
You might have heard the statement: the most important currency in business is trust. And in our new economy, the statement couldn’t be more true.
To illustrate the point…
Picture this, you’re walking in a mall, and you spot a new Apple Reseller selling iPhones. You’ve never seen it before, never heard of it. Even though the iPhones look very real, do you still trust it or the products they sell? Probably not, right?
Well, the same goes for other businesses and or potential partners. If your business is not registered, it won’t be recognised and trusted as legitimate. No matter how good it looks.
Registering your business builds trust and credibility
Registering your business is like a stamp of approval. Much like getting a certificate of qualification at the end of your studies. What it does, in the eyes of your customers and potential investors, is certify your business as legitimate.
People are naturally reluctant to try something when it is new and they’ve never heard or seen it before. So, you need all the backing you can get right from the beginning to buy their trust. Your stamp of approval, or business registration, tells them that this is a legitimate business and something worth buying into. And as a small business, you’re not only looking to gain trust but to also establish yourself for growth in the future.
Registering your business increases your credibility and legitimacy. Which will ultimately build your business’s reputation. In the process, when growth comes knocking on your business’s door, you’ll be confident enough to open.
You attract funding, investment and partnership opportunities
If you were an investor, you’d want to know that a business is legit and worth putting money into, at the very least. Especially because investing money into a business is a great commitment. Every type of investor – be it a bank, company or individual – is looking for a return on their investment and how long this will take at the end of the day. And because a registered business suggests you have a formal structure in place, your chances of attracting potential investors or getting approved for a business loan are much higher.
But wait, that’s not all. When your business is registered, it has the potential to broaden your supplier network, as potential suppliers and partners are more likely to trust established, registered businesses.
You’re free from personal liability
Muhammad Ali once said, “Expect the best. Prepare for the worst.” The reality is, things can go wrong in business. That’s why you need to be wise enough to prepare for it. And this is where registering your business works in your favour.
When your business is registered, if anything happens to it financially or legally, your business is treated as a separate entity. This means that any debt or legal matters that might happen will not fall onto you personally. Your business’s legal and financial matters aren’t your personal responsibility but that of the business.
Over and above that, what it personally does for you is give you the feeling of pride knowing that you’re recognised as an official business owner.
So, let’s get into exactly how to register a business.
While it’s different for each type of business, it’s still pretty much the same straightforward process once you get it. Oh and, did we mention you can register your business online?
Let’s get down to the nitty-gritty of how to register online through Companies and Intellectual Property Commission (CIPC).
Step 1: Create Your Account
Next, you’ll be required to fill in your personal information including, your identity number so, make sure you have that on hand.
Step 2: Name your business
In this step, you’ll have to have a name for your business. A unique, powerful and memorable name gives you a greater chance of being relevant and attracting the right people. But if you’re still figuring out your business name, check out our blog on finding the right name for your business.
For the name reservation process, you’re going to need four name options. Ensure you get the most out of your brainstorm session with a bit of help getting to the right name.
Once you have your name options and are ready to move on to the next step, make your way to Transact and then click on Name Reservation. Here, you’re required to fill in your first name choice and then three other name options, just in case your first option is not available.
Click submit, and you’ll receive a tracking number for your name reservation as well as a confirmation email. Save this email and attachment you’ll see as COR9.4.
Step 3: Do your research
Avoid going blindly into the registration process. Know what type of business you want to register and what category it falls into. If you’re unsure, consult a professional advisor or legal practitioner to understand the most suitable category for your business.
In South Africa, the types of companies that can be registered are mainly Private (Pty Ltd) and Public Companies (Ltd), Personal Liability Companies (Inc.) as well as Non-Profit Organisation (NPO).
Step 4: Register your business online
After having completed every step so far in this process, you can then make your way from the Transact page to Company Registration and begin the process.
Begin by entering your identity number and click continue to the next page. There, you’ll be prompted to fill in more of your personal information. Should you have a business with directors and incorporators, you’ll be required to fill in their contact details.
Other information required will include that of the business, from the company’s financial year-end to the number of shares issued and more.
Thereafter, continue onto the name reservation screen, where you’ll navigate to the Use Name Already Reserved tab. Your confirmation email should include a tracking number for the name reservation; enter that tracking number when prompted and continue.
You’ll know the registration is successful when a follow-up email containing your COR 15.1A document is sent to you. This document will need to be signed and dated by the incorporator/director.
Step 5: The final step – submitting all relevant documents
After all the hard work is done, it’s time to gather all supporting documents. Because until your supporting documents are received by the CIPC, you’re not done yet.
What documents are needed to complete the registration process?
- Your name reservation confirmation letter;
- Your signed COR 15.1A form;
- A certified copy of your South African ID and/or;
- Completed Power of Attorney form – should you be acting as a representative or proxy.
Scan and email all your documents to eServicesCoReg@cipc.co.za with the tracking number found on the COR15.1A as the subject line.
Once you have successfully registered your business, you can expect to receive your company registration documents, known as COR 14.3 and MOI in 1 – 3 days.
From here onwards, you have the green light to register for a business bank account and register with SARS by completing an IT77 form available on the SARS website.
Congratulations! You’re officially a business owner
Your business journey starts now. If you’re looking for more help, check out our How to Start a Business Guide.
Join the iK Tribe – a family of driven entrepreneurs who share one thing in common, the desire to move their small business forward. Visit iKhokha to find powerful business tools that make starting, running and growing your business easier so that real business growth is not just a vision, but a reality.