Financial Accounting Services

Michaelsons• Jan 18, 2019• It is no longer possible to register a new close corporation or CC. However, you can carry on trading under a CC that existed before 1 May 2011. But CCs will slowly become extinct and every CC will (at some point) have to be converted into a private company (Pty Ltd). The Pty Ltd vs CC debate is not a simple one. Pty Ltd vs CC Which one is Best? Many people chose a CC and still prefer a CC because a CC gave them the advantages of incorporation, with lower costs and simpler administration. Virtually all the advantages that a CC had, can now also be obtained by having a private company under the new Companies Act. For example: the annual return fee is the same regardless of whether you have a CC or a company small private companies do not need to be audited or produce audited financial statements small private companies do not need to convene an annual general meeting (AGM) The advantages of being a private company Some argue that there are actually more advantages to being a private company rather than a CC: Compete with bigger companies in the same market. Invite other parties to invest as shareholders in your business. Raise more capital to grow your company. Enable companies and CCs to be shareholders in your business. Benefit by being regulated by a law (the new Companies Act) that is up to date with international best practice. Administer your company electronically. Ensure that the rights, duties and responsibilities of members are clearly set out. Avoid disputes between members.

SARS• Jan 18, 2019• What is the Employment Tax Incentive (ETI)? It is an incentive aimed at encouraging employers to hire young and less experienced work seekers. It reduces an employers cost of hiring young people through a cost sharing mechanism with government, while leaving the wage the employee receives unaffected. The employer can claim the ETI and reduce the amount of Pay As You Earn (PAYE) tax payable by the amount of the total ETI calculated in respect of all qualifying employees. This incentive came into effect on 1 January 2014. Why the Employment Tax Incentive? Many young South Africans are excluded from economic activity, and as a result suffer disproportionately from unemployment, discouragement and economic marginalisation. High youth unemployment means young people are not gaining the skills or experience needed to drive the economy forward. This lack of skills and experience can easily become an impediment to employment, thereby having long term adverse effects on the individual and the economy. In response to the high youth unemployment rate, government has implemented an incentive aimed at encouraging employers to hire young and less experienced work seekers, as stated in the National Development Plan. Who qualifies for the ETI? Employers who are registered for Employees Tax (PAYE) with SARS. Only employers who are tax compliant will be able to claim the ETI. However the amount will be available, subject to limitations, once noncompliant employers become compliant. Who doesnt qualify for ETI? National, provincial and local spheres of government. Public entities listed in Schedule 2 or 3 of the Public Finance Management Act Parastatals, government entities or municipal entities, unless the Minister of Finance designates them by regulation Employers who have been disqualified by the Minister of Finance due to displacement of employees or by not meeting conditions as may be prescribed by the Minister by regulation

SARS• Jan 18, 2019• As soon as a taxpayer commences a business, whether as a sole proprietor, a partner in a partnership or as a shareholder in a company, then you need to register at your SARS branch to get an income tax reference number. You must register within 60 days after you have started your business by completing an IT77 form, which can get from your SARS branch or below. The nature of your business truly affects what you pay in tax. There are are many different forms of business. We have described the legal form of each and the basic advantages and disadvantages of each. Sole Proprietorship Partnerships Private Companies Close Corporations (CC) Although no new CCs can now be formed The other types of business include Small business corporation (SBC) Micro business Personal service giver Labour broker Independent contractor Small, medium and micro enterprises (SMMEs) Information on SMMEs, details of various assistance schemes, rebates, incentives and information the as how to start a business, types of business entities and requirements of registration of a business entity, can be obtained from depending on Department of Trade and Industry or on its website www.dti.gov.za. Top Tip: Some businesses deal with a Tax Practitioner for their tax matters. Only deal with registered and reputable tax practitioners. You can check if theyre registered with an accredited professional body and youve got better protection if they belong to a registered practitioner association.