This article will explain how your accountant can assist you in starting your own company. This is by no means an extensive guide but more of an overview for the small business owner who wants to carry out their business operations through a private company.
Congratulations on having that bright idea and taking the leap of entrepreneurship and working hard to make it a reality.
1. Dream up a catchy name
Give your accountant at least four names and let her check the availability with CIPC for you. Let her reserve the available name for you with CIPC. Now that you have decided to breathe life into Amagoingbig (Pty) Ltd, these are the next steps you can take.
2. Incorporate Amagoingbig (Pty) Ltd
Your accountant will need the following documentation from you in order to obtain a company registration number from CIPC:
– Certified copies of all directors ID books
– Directors email address, cellphone numbers, residential address and postal address
– Company email address, phone number, physical and postal addresses
– Application form signed by all directors
3. Ownership of Amagoingbig (Pty) Ltd
Decide who the owners (shareholders) will be and the percentage ownership they will have. Your accountant will issue each shareholder with a share certificate. She will also note all the shareholders, directors, auditors, registered address and any changes thereto in a company register.
4. Open a bank account
You can now take the following documents to Best bank to open a business bank account:
– Incorporation documents from CIPC
– Proof of address documents for all of the directors
– Proof of registered address for Amagoingbig (Pty) Ltd
– Application form of Best bank
5. Get a proper accounting system
At this point I would recommend Proper accounting package for record keeping and processing of customer invoices. Do not use Word/Excel to process invoices to customers. I have seen too many embarrassing mistakes being made by businesses that use Word/Excel to invoice their customers.
6. VAT registration
At this point decide if it would be beneficial to register Amagoingbig (Pty) Ltd for VAT. If Amagoingbig (Pty) Ltd turns over less than R1 million in any 12 months, registration is not compulsory.
If you do have to register for VAT, consider saving 14% of Amagoingbig’s vatable profits into a separate savings account to ensure that VAT monies due to SARS are readily available when they become payable. Remember that your business merely acts as an agent for SARS and that the VAT charged on an invoice does not belong to your business.
7. Budgets and reporting
Best bank may require future cash flow projections and past performance reports once you come knocking on their door for that overdraft or financing for Amagoingbig’s new delivery vehicle. Budgets are not just important to Best bank, it is also essential for the directors to compare the budget against the actual numbers to determine if Amagoingbig (Pty) Ltd is really going big or of its busy going bust.
8. Income tax
Income tax is payable 2 or 3 times a year. The 3rd time depends on whether you estimated the first 2 correctly. Income tax is a very complicated matter and it is essential that you use a qualified tax practitioner to prepare your taxes. Ask for your tax consultant’s SARS Practitioner number. Having proper accounting systems and procedures in place can assist greatly in your businesses ability to meet its tax obligations in full and on time.
Once again I would recommend to have a dedicated savings account where you can save for your taxes. This just relieves some of the stress when tax pay day comes.
This is all I have for now folks. Remember whatever you do, think forward and be savvy about it. Like us.