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Company registration

Everything you need to know about registering a company

Company registration

Everything you need to know about registering a company

Company Registrations

Company registrations are done through CIPC (Companies and Intellectual Property Commission) located in pretoria. This is the company registrar and all changes to a company must be effected and lodged with CIPC. It is responsible for maintaing the public register of active, deregistered and liquidated companies. Furthermore they keep records of directors, auditors and business contact particulars. They also provide the company with a company registration number under which it can operate.

Want to start a company

There are some things to keep in mind if you start a company that will service clients or let us help you from the start.

Want to start a company

There are some things to keep in mind if you start a company that will service clients or let us help you from the start.

product or a service

Before you start a new company, you must first know what product or service the company will offer its clients. In other words, what is the reason the company exists. It can be as narrow as simply holding an investment property or it can sell products or services or a combination of products and services.

Companies usually have the objective of making profits whilst creating massive benefit for their clients. If the service or product does not provide value to the client, no one will buy it.

product or a service

Before you start a new company, you must first know what product or service the company will offer its clients. In other words, what is the reason the company exists. It can be as narrow as simply holding an investment property or it can sell products or services or a combination of products and services.

Companies usually have the objective of making profits whilst creating massive benefit for their clients. If the service or product does not provide value to the client, no one will buy it.

create value

Value is the most important part of running a business that services clients. If they do not value your product, they will not pay for it or recommend it to anyone. In fact they might even tell everybody about their bad experience. That bad experience is not getting value for what you paid for.

When you create value for your clients, your client will become a repeat customer. They will tell others of the great service or product they got from your company.

create value

Value is the most important part of running a business that services clients. If they do not value your product, they will not pay for it or recommend it to anyone. In fact they might even tell everybody about their bad experience. That bad experience is not getting value for what you paid for.

When you create value for your clients, your client will become a repeat customer. They will tell others of the great service or product they got from your company.

Just do it

Just start! It is vitally important to just start. If you plan and plan, later you might have the perfect plan, and maybe not. Real life is much more unpredictable than the lab like constraints of your own mind planning away.

It is best to just start and get that first sale. That is when you see, o wait, i need to organize this, deliver that, print this or that. Get the first sale as quickly as possible and then optimize your business.

Reinvest the funds back into operations and improvements in the long run. Always keep the clients needs in mind when you are improving the business.

Just do it

Just start! It is vitally important to just start. If you plan and plan, later you might have the perfect plan, and maybe not. Real life is much more unpredictable than the lab like constraints of your own mind planning away.

It is best to just start and get that first sale. That is when you see, o wait, i need to organize this, deliver that, print this or that. Get the first sale as quickly as possible and then optimize your business.

Reinvest the funds back into operations and improvements in the long run. Always keep the clients needs in mind when you are improving the business.

Think about the client

These days the talk is all about UX or User Experience. Go and sit on the clients chair and say to yourself, is this what i would like to experience as a client. Is this chair comfortable? how much of a hastle was it to get an appointment, get a quote, use the product. How long does it take to get back to the client.

It is usually the easiest to imagine the first time experience the potential client has with the product or service. Is this product of worth to the client and how easy was it to use the product. Most big business’s have tremendous value that they provide their clients.

Think about the client

These days the talk is all about UX or User Experience. Go and sit on the clients chair and say to yourself, is this what i would like to experience as a client. Is this chair comfortable? how much of a hastle was it to get an appointment, get a quote, use the product. How long does it take to get back to the client.

It is usually the easiest to imagine the first time experience the potential client has with the product or service. Is this product of worth to the client and how easy was it to use the product. Most big business’s have tremendous value that they provide their clients.

Want to grow your company

 if you want to grow a company these are the things you need to keep in mind. Click here and we will set it up as quickly as humanly possiable.

Want to grow your company

 if you want to grow a company these are the things you need to keep in mind. Click here and we will set it up as quickly as humanly possiable.

Scalability

Some things just scale better than others. Whenever you need to give personal attention to something, that reduces scalability. Your business only runs as smoothly as the worst performing part. If that is getting back to clients as example, fix it. If that is providing them with an accurate quote quickly, fix it. They way you “fix-it” is to scale.

Products are easier to scale than services. Products need a manufacturing and distribution chain which is much easier to automate (from the clients perspective). Services need much more work to scale. The variables are much more and more difficult to automate. But here is the secret! 

The Secret Sauce

 Every little part you automate, makes your business more scalable and you can scale over time.
The more you can scale, the bigger the business can grow.

Limited Personal Liability

 

Companies have limited personal liability except if you sign surety or an acknowledgement of debt (AOD) for the business. If you do not sign surety for the company, then only the company is responsible for paying its creditors. Even If the company gets liquidated, you are not responsible for paying its creditors. You are however responsible for paying its taxes and in certain circumstances can be held personally liable for payment thereof.  

Most banks will not offer an overdraft or other loan facilities without all or most of the directors signing surety. Vehicle financing will usually require a surety. Commercial landlords usually require sureties. Some suppliers will require sureties before providing your business an account on which they can purchase stock. Obviously if you purchase stock in cash, it will not require sureties.

 

Tax Liability

You do not need to sign surety for sars to be held personally liable for the taxes that your business creates. The Tax Administration Act (TAA) declares you personally liable for the outstanding taxes of your business even if you later liquidate the business because of the tax liability. Sars can however write off the taxes if they so choose after they have claimed from the liquidated estate and received a dividend or not.

Want to run your company

If you want to run your company successfully these are the things you need to keep in mind. Click here and we will sort it out as quickly as humanly possiable.

Want to run your company

If you want to run your company successfully these are the things you need to keep in mind. Click here and we will sort it out as quickly as humanly possiable.

 legitimize your business

As a company your business will look more professional. If you took the time to create a company and it has a website and has branded letterheads and emails, the client immediately feels more at ease in paying for the product or service that you offer. Provided they need it and is willing to pay for it of-course.

Now is the time to start thinking of who your customer should ideally be. Maybe you do not sell to people but rather to other companies. Focus on your ideal client and build your business to acquire them. Always under promise and over deliver. That means delighting customers with your offering, even after the sale has been done. This can be as easy as sending out a quarterly newsletter or maybe just congratulating your customer on his birthday and new year. Even if you think you don’t need to offer after sales care, you do.

All sorts of unqualified leads will contact your business. Usually a potential customer will be qualified as a qualified-lead before even providing a quote for that customer. In this way you control your business. If you provide a quote for work that you do not want to do, you will at some point have to start doing that work. Or if the quote is not high enough to out-source or in-source a solution if it is not the business’ area of expertise or ideal customer. 

If you manage to attract more of your ideal customers, Your business will be more profitable, easier to manage, and easier to scale

Minimise Taxes

Companies are taxed at 28%. That means that if your company does a sale, your company must deduct the “cost-of-sale” or rather all the expenses that it had in offering the product or service, thereafter all business expenses must be paid, such as rent, salaries and owners drawings. Thereafter the business will have a profit left over on which it must pay its income tax.

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company dividends

If the company declares dividends, it will have to pay a secondary tax on the dividends. Dividends are taxed at a rate of 20% (*2020).

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VAT (Value Added Tax)

The company will also pay VAT (Value Added Tax) at a rate of 15% on the sale of its products or services if the company exceeds R1m worth of sales in 12 months.

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Individual Income Tax

Furthermore the Directors will have to pay Individual Income Tax on their personal scale.

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Assortment of taxes

Besides these taxes, a company pays an assortment of taxes like uif, paye, sdl and others

There are many tax write-off’s however that you enjoy as a company. The first and most beneficial is the 28% income tax level. If you did business on your own name, your taxes can go to 40% of your income. It is also much harder to justify expenses for your sole proprietorship than it is for claiming tax benefits for a company. Sars just looks at it differently.

Attract more customers

Customers are much easier to attract these days with the internet. There are platforms, such as google, Facebook and YouTube among others where you can essentially market your business for free. You will not gain over night success but, not having to spend money on marketing when a business is just an idea is useful, but sometimes impractical.

Paid advertising

If you want to attract more customers, you will need to pay for advertising. You will also need to write the ad copy. The ad copy should attract your ideal client by communicating the value of your product or service clearly to them. It should solve a problem and call the potential client to action. That action can be to give you a call, setup a meeting, request a quote or to buy the product you are promoting.

Create trust

You attract clients by creating trust in your business and your brand, communicating that trust and the value of your product. To communicate your business offering, you will have to demonstrate your offering and its value to the customer. This can take the form of one to one marketing to individuals or companies that are well positioned to forward potential clients your companies way.

Its all about Branding

It is becoming more and more important to have a website that looks good and fuctions great. It should be a pleasure to work with, easy to navigate and have quick loading times.

Ideally your company must convey to your clients in its communications and promotions that they are dealing with one entity or a group of entities that have a very spesific purpose.

Branding conveys to your customer that you go that extra mile. You believe in their experience in dealing with you. Branding also conveys to the potential client if they are a good fit for your business.

Its all about Branding

It is becoming more and more important to have a website that looks good and fuctions great. It should be a pleasure to work with, easy to navigate and have quick loading times.

Ideally your company must convey to your clients in its communications and promotions that they are dealing with one entity or a group of entities that have a very spesific purpose.

Branding conveys to your customer that you go that extra mile. You believe in their experience in dealing with you. Branding also conveys to the potential client if they are a good fit for your business.

Its all about Marketing

Ok, I just said its all about branding, but actually its all about marketing. Usually what you spend on acquiring a client is less than what your company makes after the sale has been completed. If it costs as much to acquire a client as you are making in the end of the day, the wheels are spinning, but you ain’t going anywhere.

If it costs less to acquire a customer than what the business makes in selling its product or services, then all you need to do to become successful is to market more to get more clients. 

It is not really that easy, but the point is, many business’s start minimising their advertisement budget the moment the cashflow is tight. This is the time to advertise more and get more sales. Obviously there are exceptions and you need to use your good common sense. If your business is seasonal, maybe just market it seasonally and offer different products or complementary services in the quiet months. As you get more clients, think about how the business will scale to service more clients at the same time.

Its all about Pricing

Ok, I know i just said its all about branding and marketing, but its actually all about pricing. a staggering 85% of business’s that liquidate, is because that business was not profitable. The thing that effects the bottom line the most, is the price at which the product or service is offered. Many services underestimate the time being spent on just getting the product or service out the door. We need to price goods and services to sustain the business activities in the long run and maybe even grow the business.

Pricing is one of the most important and worst understood topics. Many people think that you need to “compete” on price, but actually all business’s fit into the market neatly. Depending on its value, the market will choose to pay for it or not. Does the market tolerate paying more or less for a product or service. This is what we call market tolerance. 

Usually the market tolerates bigger variances in pricing for services and not so much for products.

Its all about the structure

Ok, just joking. But yes, structure is important. If you put your companies shares into a trust, you are no longer the owner of those shares, but you do control them if you also happen to control the trust. This structure is many times utilized to avoid other business creditors for which you have signed surety, to attach another business just because you own the shares. If you owned the shares, that constitutes and asset in your estate and is legaly executable. Thus, to avoid one business having an effect on all your business’s, put them in trusts, and don’t sign sureties. If you do need to sign sureties, then don’t let your trusts also sign surety.