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The governance of a company commences at the point of registration with CIPC (Companies and Intellectual Property Commission). At this juncture, your company becomes obligated to adhere to the Companies Act 71 of 2008 and Income Tax Act 58 of 1962, in addition to any other relevant regulations specific to your industry. Here are some key considerations related to these two legislations that you should be aware of before registering your company with CIPC:

Companies Act:

  1. Operational Guidelines: The Companies Act outlines the operational standards for companies in South Africa. This includes rules regarding connected party relationships, financial transactions between connected parties, document retention periods, auditing requirements, and the roles and responsibilities of shareholders and directors, among other aspects.
  2. Memorandum of Incorporation (MOI): CIPC offers two options for your MOI. You can choose to use their standard MOI or customise it to meet your specific needs while ensuring compliance with the Companies Act.
  3. Standard MOI: CIPC’s standard MOI sets out the minimum requirements regarding the rights, duties, and responsibilities of shareholders, directors, and others involved in the company as per the Companies Act.
  4. Director Eligibility: Ensure that individuals appointed as directors meet the eligibility criteria outlined in the Companies Act.
  5. Shareholder Register: Maintain a shareholder register that lists the names of shareholders, along with the number and percentage of shares they own in the company.
  6. Annual Return: You are required to submit an annual return to CIPC, which should include the company’s turnover amount and relevant documents, such as annual financial statements. Be prepared to pay the prescribed levy. This submission is obligatory, even if your entity is dormant or actively trading.

Income Tax Act:

  1. Income Tax Number: CIPC will automatically generate an income tax number for your company upon registration.
  2. Additional Taxes: For other taxes such as VAT and Employee’s tax, you’ll need to register separately if your entity meets the qualifications for these taxes.
  3. E-filing Profile: Setting up your E-filing profile is not done automatically. You or your tax practitioner should take the necessary steps to establish this profile.
  4. Financial Year End: By default, SARS (South African Revenue Service) sets the financial year end for each taxpayer as February. If your company’s financial year end differs from this, make sure to update it with SARS before submitting your returns.
  5. Provisional and Income Tax Returns: Whether your company is actively trading or not, it’s mandatory to submit provisional tax returns and income tax returns for each year of assessment.

For more detailed information and personalised guidance, feel free to contact us for a consultation. compliance

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