Understanding Legal Obligations Of Your Business
By Precious Mvulane
The third step in managing your business finances, from The Essential Finance Handbook for Entrepreneurs is ensuring that you understand the legal obligations of your business. Once you understand these, you need to ensure that all parties involved in the business are complying with their personal responsibilities to the business and that the company is meeting all of its responsibilities.In general the legal obligations of a business relate to:
- Structure And Registration
The first thing you need to do is register your business. The Companies and Intellectual Property Commission (CIPC) is an organisation that administers the registration of companies, cooperatives and intellectual property rights such as trademarks, patents, designs and copyright. Our previous blog highlighted the benefits of having a business structure and selecting the right one for your specific business.
Taxation needs to be addressed from both a business and an employee perspective.
South African Revenue Services (SARS) takes care of all tax matters and it is a legal obligation to pay tax regardless of the size of the business you are running. The law dictates that you must register your business with SARS within 60 days of starting operations.
If you have registered with CIPC the registration is automatic unless you are a sole proprietoror in a partnership. If that is the case, you would need to register as provisional tax payers directly.
From an employee perspective, depending on their earnings, you may have to register your company for Pay As You Earn (PAYE) and if your payroll is above a sertain threshhold, you you will be required to register for the Skills Development Levy (SDL) as well.
- Employing People
If you employ staff you will have a number of additional obligations. These may include workmen’s compensation, safety in the workplace, remuneration, taxation, employee records, leave entitlement etc
You will be required to understand and align with the requirements of the Department of Labour.
Regardsless of the type of business you own, it is important to understand your obligations relating to contracts or agreements. These could be with staff, contractors, suppliers and customers.
You need to understand Occupational health and safety responsibilities relating to the health and safety of your staff, contractors, customers and the general public.
- Customer Information
Very topical at the moment is the protection of information and compliance with the POPI Act (Protection of Personal Information Act). It is important to understand your responsibilities and make you’re your business is complying to avoid penalties.