How to register your online business in South Africa

With the global pandemic, social distancing, lockdowns and other regulations in place, we now shop, meet, exercise and even work online. Some of us are even changing careers into the ecommerce sector. In fact, the ecommerce market is estimated to reach US$4,608m in 2021 in South Africa, with the biggest of those industries being fashion.

So, if you’re thinking about starting an online business, now is the time to do it. However, there are several steps to getting started.

Firstly, there are different types of business models in South Africa, and while not all of them need to be registered with the Companies and Intellectual Property Commission (CIPC), they do all need to be registered to pay tax with the South African Revenue Service (SARS).

Smaller businesses like sole proprietors and informal traders/spaza shops don’t need to register with the CIPC or SARS - if your profit falls within a certain tax bracket. However, companies looking to become an official brand are required to be registered with the CIPC.

So, before you can register, you need to know what type of business you’re looking to own, and the regulations associated with each.

Different types of businesses

The difference between a registered business and a sole proprietor is that your personal finances and business income are recognised as the same. This means you can’t declare your business for bankruptcy before declaring yourself bankrupt.

For larger businesses, the Companies Act divides registered businesses into two sectors: profit companies and non-profit companies.

The South African Companies Act 2008 offers a full breakdown of each, and their respective rules and regulations.

Once you know what type of business you’re looking to start, you can move onto the next steps.

How to register your online business in South Africa with the CIPC

If you’re going to be a sole proprietor, you don’t need to register with the CIPC, but you must register with SARS.

The following steps apply if you are:

  • A South African resident with an official ID number
  • Wanting to register a private company
  • Looking to register with the CIPC directly.

You can either register your business via the CIPC website directly or through a financial institution such as Nedbank or FNB.

Step 1: Have the correct documents ready

While you won’t need all these documents initially, the process is quicker if you have them already.

  • R175 for your registration fee
  • Digital, certified copy of your South African ID
  • Details and IDs of all the directors who form part of the business
  • Contact details
  • Physical address
  • Power of attorney letter (if applicable)

Step 2: Register as a CIPC customer

You first need to register as a CIPC customer before registering your business. This process is quick and only requires you to pay R175.

To register as a customer, complete the following:

  • Log onto the CIPC website
  • Select Online Transacting
  • Select Register as a Customer
  • Follow the prompts on the website and fill in the required fields to register
  • Once complete, you’re assigned a CIPC Customer Code that you must record and use as a reference to deposit your R175.

To pay your deposit, you can find the banking details under the Contact Us tab on the CIPC website.

Step 3: Register your Business

Once you’ve received confirmation from the CIPC, you’re ready to continue.

  • Log onto the CIPC website
  • Select Online Transacting
  • Select E-services
  • Select Company registration
  • Log in using your CIPC Customer Code which was sent to you when you registered.
  • Select Register a New Company and fill in the required fields.

Step 4: Declare your company name

If you don’t have a name for your business already, there are three options available to you:

  1. Apply for a name. If you have more than one name in mind, be sure to list them in your order of preference. Once you click submit, the platform will show you which names are available. Select Lodge Name Reservation on the one you want, to receive a reservation number.
  2. Use a name you’ve previously reserved. This means that you’ve already completed and submitted a CoR 9.1 form.
  3. Register a company using an enterprise number if you don’t have a name yet.

Step 5: Lodge your company and send forms

Once you’ve selected your name, you’re redirected to a confirmation screen that lists all the information you’ve provided.

By clicking Lodge Company, you’re affirming the information is correct.

The CIPC now processes your information, which can take up to 5 weeks.

You’ll receive an email with forms attached which need to be printed, signed by you, and sent back with the required supporting documents.

If you don’t have access to a printer and scanner, internet cafés and printing shops also offer these services. Be sure to save the documents onto a USB before you go.

Step 6: Register your business with SARS

Your business must be registered with SARS using an ITT77 form, within 60 days of starting.

By implementing a dynamic invoicing system like Sufio on your website and utilising a tax service like TaxTim, your business can stay within the law, and you might even be eligible for tax rebates as well.

Start with Shopify

Now that your business is registered, setting up your online store is easy. With easy to navigate templates, customisable settings and 24/7 support, your entrepreneurial ambitions are just one click away.

Whether you’re starting a custom clothing fashion brand in the Northern Cape or selling Gogo’s handmade dolls from Mthatha, it’s quick to start, sell, market and manage your online business with Shopify.

Useful resources:
Shopify is a platform that gives anyone the tools to start, sell, market, and manage their business. Sign up to Shopify for a 14-day free trial. No credit card required.
Share on Twitter Share on LinkedIn Share on Facebook
Share via Email
©2021 All rights reserved.
Follow us on Twitter Follow us on LinkedIn Join us on Facebook