How to register a new business

Congratulations! You’ve made the decision to start a company. Now you have to follow the legal requirements to register your business in South Africa. LEAP simplifies the steps for entrepreneurs, so you can register your company and start trading.

In May 2011, the Companies and Intellectual Property Commission (CIPC) was introduced to replace the Companies and Intellectual Property Registration Office. The CIPC is responsible for the registration of businesses in the country. Simultaneously, the Companies Act came into effect, altering the way in which businesses could be registered, including that no new close corporations could be registered.

The first step in the process is choosing the type of business you want to register. In South Africa there are two categories available: non-profit and profit.


These are companies that are created for the benefit of the public or for another object, relating to social or cultural activities, or communal or group interests. Profit is not the primary objective and any income or property is not distributed to directors, members, officers or its incorporators, with the exception of reasonable compensation for services rendered. The company must have a minimum of three directors and the name of the company will end with “NPC”.


There are four main types of profit companies: personal liability, state-owned, public, and private.

1. Personal liability company

In this type of company, liability is shared by directors, and it is usually registered by individuals like doctors, lawyers, accountants, etc. Directors and past directors are liable, together with the company, for all the debts and liabilities incurred during their time of employment. It must have a minimum of one director and the name of the company must end with the term “Incorporated”.

2. State-owned company

For a company to be state-owned, it must be owned by a municipality. Additionally, the name of the company must be followed with “SOE Ltd”.

3. Public company

A public business can offer shares to the public, with an unlimited number of shareholders. Only one member is required for incorporation and the name of the company must end with “Limited” or “Ltd”.

4. Private company

This type of company is the most common and simplest type of company to register, and it is ideal for entrepreneurs. It can be founded and managed by one director, but may have more than 50 shareholders. A private company has less disclosure and transparency needs, it is not listed on the stock exchange and shares are not offered to the public. The company’s name must have “Proprietary Limited” or “(Pty) Ltd” behind it.
When choosing the type of business you will register, tax and other considerations impact your choice. Once your decision is made, you will need to register with CIPC in order to trade. This process can be completed online, through the CIPC website (, which is perfect for smaller businesses. Online registration is recommended as these applications are given priority.


In order to register a company, you first have to register as a customer on the CIPC website. After filling in the required details, a username and password will be provided to you. Log in using these credentials, click on the “on-line transacting” tab and follow the step-by-step guide. You will need to fill in information for the director/s and the business, and have supporting documents – based on the type of business you are registering. These can be found on the CIPC website. Once registered you will need to fund your new virtual account. The fee to register a company varies between R125 and R475, depending on the type of company being registered.
In addition you will need to submit two forms: a Memorandum of Incorporation (MoI) and a Notice of Incorporation. Both of these can be downloaded from the CIPC website. The MoI must have the details of the incorporators, the number or directors, and the share capital. The Notice of Incorporation contains the type and name of the company, the incorporation date, number of directors, financial year-end, and the registered address.
A company can also be registered without a name, in this case the company’s registration number is used instead. Between 1 and 4 names can be reserved – at a cost of R50 per name. Whether you have a company name, are using the registration number, or have reserved names, this information needs to be included in the Notice of Incorporation.

It is not necessary for all businesses to register with the CIPC. Sole proprietors, for example, trade under the owner’s name and there is no separation of personal and business assets and liabilities. However, it is required in order to trade with government and the formal sector.
The registration process is simple through the CIPC website, but it’s once your company is officially registered that all the hard work really begins.

LEAP provides a support system that entrepreneurs can rely on to help them grow their business. From legal and financial, to tax and insurance advice, LEAP is here to help. For more information call us today on 011 449 7974 or visit

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