South Africa, or officially the Republic of South Africa, is the second-largest economy on the African continent ranked by nominal GDP.
It is the powerhouse of Africa and very much the driving force behind this expansion of the whole continent, with the most advanced, broad-based economy. With that said, South Africa is a great place to start a business. We have gathered all the important information you need to start a sole proprietorship business.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take
Sole proprietorship in South Africa
A sole proprietorship is a business owned and operated by a natural person and is the simplest form of business type. The income from such business should be included in the owner’s income tax return and the owner is responsible for the payment of taxes thereon. The owner assumes the business risks to the extent of all of the owner’s assets, whether used in the business or not.
Some advantages of a sole proprietorship:
- Simple to establish and operate
- The owner is free to make decisions
- There are minimum legal requirements
- The owner receives all the profits
- It is easy to discontinue the business
How to register a sole proprietorship in South Africa
A sole proprietor registers and operates a business on their own. Considering that a sole proprietorship is not a legal entity, registration is not necessary apart from the standard legal and tax requirements.
However, you will be required to register the business with the South Africa Revenue Service (SARS) for purposes of tax returns.
To start a business, you will need the following documents:
- ID or passport of the applicant
- Power of attorney to sign all the related documents
Gaining a Sole Proprietor Certificate in South Africa
The Sole Proprietorship Certificate registration costs between R 590- R990 (between EUR 30-50). With this certificate, you obtain a registered trading name and a personal tax number.
As a registered taxpayer, you can sign up to use the SARS eFiling service, which allows you to file a tax return, make payments to SARS, request a tax clearance certificate, and access many other benefits.