Guide: How to Register a South African Company and Your Initial Obligations

By Marcus Schaefer | Associate Director

Whether you are a local entrepreneur or a foreign investor, establishing a business in South Africa requires strategic planning and legal compliance from the outset to ensure a strong foundation on which to grow. This guide walks you through the key steps to register a South African company and highlights your immediate legal obligations.

1. Choose the Right Company Type

Most businesses register as a Private Company (“(Pty) Ltd”), which offers limited liability, separate legal personality, and flexibility in operations. Alternatives include Public Companies, Non-Profit Companies (NPCs), and Personal Liability Companies, each with distinct features and requirements that suit the needs of different businesses.

2. Register with the CIPC

The Companies and Intellectual Property Commission (CIPC) oversees company registrations and allows online registrations which typically take only a few business days to finalise. The incorporators of the company will be the first directors and will take on the initial fiduciary obligations.

Should you wish to reserve a company name, this can also be done through the CIPC and is reserved for an initial period of six months.

3. Prepare the Memorandum of Incorporation (MOI)

The MOI is a mandatory document which sets out the rules for managing the company, including director powers, shareholder rights, and decision-making processes. The CIPC offers a standard version, but businesses with investors or multiple shareholders should consider a customised MOI tailored to their needs. This can be done at the time of registering the company, or as part of your initial steps post-incorporation.

4. Issue Shares and Maintain a Share Register

Once registered, your company must formally issue shares to its initial shareholders. This step is essential to reflect ownership in the company. The board must authorise the share issue by resolution, and a share register must be maintained as part of the company’s official records.

Legal advice is strongly recommended at this stage, especially where multiple shareholders or different classes of shares are involved.

5. Register for Tax

After incorporation, your company will automatically be registered with the South African Revenue Service (SARS) for income tax. Depending on your business model, you may also need to register for:

• VAT, if annual turnover exceeds R1 million
• PAYE, UIF, and SDL, if employing staff
• Provisional tax, based on expected income

6. Open a Business Bank Account

A separate business bank account is crucial for proper financial management. Banks require your registration documents, proof of address, and IDs for all directors.

7. Comply with Ongoing Legal Obligations

Post-registration, legal compliance obligations continue, in the form of:

• Filing annual returns with CIPC and SARS
• Maintaining accurate financial and company records
• Renewing and maintaining industry licences, where applicable
• Assessing B-BBEE requirements for your sector

Legal Guidance from Day One

A legally sound foundation protects your business and facilitates future growth. Our firm offers end-to-end support from company registration, to preparing MOIs and shareholder agreements, as well as advising on ongoing company governance and compliance matters.