Editor’s Note: If you would like to talk to the Quattro team about your business structure, please email us at [email protected].
It seems as though 2016 has a rough ride in store for us but as the wise old saying has it: “Fortune favours the brave”. Just remember to mix a good dose of realism in with the bravery.
That said, if you’ve been sitting on a brilliant business idea, and if you’ve ever dreamt of leaving your 9 to 5 job and starting up on your own, this could well be your year!
Get going with these 3 steps:
- Consider checking first that you are suited to the excitement, rewards, risk and rough-and-tumble of entrepreneurship by taking the “Entrepreneurial Personality Profile” test on the Psychology Today website at http://psychologytoday.tests.psychtests.com/take_test.php?idRegTest=3204.
- Passed the test? Great, next step is to get off on the right foot with “Starting a Business: Ten Simple Rules for a Successful Start-up” on the Business Partners website at http://www.businesspartners.co.za/starting-a-business/. (Tip: Don’t ever lose sight of Rule 10 “Enjoy Yourself”!)
- All done? Stage 3 is to choose the right trading vehicle to suit your particular needs and those of your new business. This is important – starting off with one legal entity and then later moving the business to another type risks all sorts of unhappy legal and tax issues (quite apart from all the obvious practical ones, like wading through piles of red tape at SARS, Telkom and your bank’s “please hold, your call is important to us” call centre).
In South Africa you have these four main options to choose from:
- A sole proprietorship (“sole trader”). Only one owner – you are the business.
- A partnership of 2 to 20 owners.
- A private company (“Pty Ltd”) for any number of owners (“shareholders”). (CC’s – close corporations, still exist, but no new ones can be registered).
- A business trust (also any number of owners).
There are other specialised types of companies available only to non-profit organisations (charities and the like), and to professionals (lawyers, accountants, doctors etc.) and various ways in which different legal entities can be combined but for the purposes of the newsletter we have only referred to the 4 most common options listed above.
It is important that you do not make any decisions without first seeking professional advice on the legal and tax implications of using each type of entity. QUATTRO ACCOUNTS is an accounting services company that specialises in assisting SMME’s with bookkeeping, accounting, tax, company secretarial and advisory services.