Here’s how you register your business – and all the forms you need
Five out of seven business start-ups in South Africa fail in their first year according to Rob Davies, Minister of Trade and Industry. Globally, one out of two start-ups fails during its first year.
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Thanks to Berkowitz’s website, PersonalEmpowerment.co.
7 Registering your business
Once you have decided on the structure and name of your business, you have to register. Registration involves several steps depending on your decisions, but usually includes some combination of the following:
- Reserving a name;
- Lodging a founding statement;
- Filing the memorandum and the articles of association; and
- Filing the written consent of auditors to act for the company.
Contact the Companies and Intellectual Property Commission (CIPC). It is responsible for the registration of companies, cooperatives and intellectual rights in South Africa. To view the CIPC service fees, click here. To find the forms for establishing your business, click here.
Your business will only be registered after you have completed and submitted these two forms and sent them in together: Notice of Incorporation and Memorandum of Incorporation. Remember to fill in the appropriate form for the type of company you want to establish.
When you apply to register your business name, you can submit up to four name alternatives; your number is required and there is a fee if the registration is carried out online. The form is available here.
The complete guide for the process of registering with CIPC and information about necessary documentation is available here.
You will also have to open a bank account for the business, and register for tax with the South African Revenue Service (SARS). You can call SARS at its national contact centre (0800 00 7277) or find the SARS office closest to you here.
If you employ staff, you will have to register with the South African Department of Labour and the Unemployment Insurance Fund, and with the Compensation Fund so they can claim compensation for accidents or diseases at work.
In order to get your business idea off the ground, you will have to share it with someone who can help you but, of course, this comes at the risk of the individual stealing it. Hopefully that won’t happen, but it’s better to be safe than sorry. There are a number of ways that you can protect your innovative product or your concept for improved ways to serve your customers.
Before you are able to patent your idea, you will have to make it tangible and ensure that it is unique. An idea, in and of itself, is just an invitation to create something but until you have actually created the design, process or product, you cannot protect it legally. Write down clearly what your creation is, how it works, how it could be produced in bulk, how much this would cost and how it benefits the consumer.
In order to get your idea to the stage where you are able to register it legally, you will have to work with trustworthy people whom you have researched thoroughly. You could also consider having them sign a non-disclosure agreement which will mean that information that you share with them will remain confidential. This can either be between two parties, ensuring that no third party is privy to information, or it can go one-way (since you’re sharing your idea with them).
You can also have your collaborators share a non-compete agreement which prevents the individual or entity from starting a business which would threaten yours. Alternatively, if you hire the person to develop your product, they can sign a work-for-hire agreement and ensure that you own any and all improvements made to the idea. This means they will have no rights to your invention.
If your business is based on an invention, then you can patent it; and if it is along more “intellectual” lines then you are eligible for copyright protection. These can be registered through the Companies and Intellectual Property Commission (CIPRO).
A patent is a set of exclusive rights granted by the state to a person (the patentee, usually the inventor) for a fixed period of time in exchange for the regulated, public disclosure of certain details of a device, method, process or composition of matter known as an invention, which is new, inventive, and useful or industrially viable. You can register a patent if you have created a new invention such as a product or process. This will mean that someone else cannot commercially make, use, distribute or sell your invention for up to 20 years – provided that you renew it every year before the third year of expiration and you pay an annual renewal fee to keep it active. Although you can file your own provisional patent application, it is recommended that you work with a patent attorney.
Copyright is a set of exclusive rights regulating the use of a particular expression of an idea or information. At its most general, it is literally “the right to copy” an original creation. If you create an original work that people can see or hear such as a book, painting or music, you do not necessarily have to register in order to secure copyright. Instead you can add the copyright symbol (©) to your original work, the copyright law protects you and your work so
that other individuals and businesses cannot use your material without giving you recognition for the work and, in some cases, even paying you royalties. But if you want to copyright a creation such as a film, DVD or video, then you can apply to the Registrar of Copyright using these forms.
You can also register a design with CIPC to maintain exclusive right to the design and prevent others from making, importing or using it. You can either register an aesthetic design or a functional design. The former relates to a unique shape, configuration or ornamentation that appeals to the eye; and the latter refers to a shape or configuration that is necessitated by its function. Aesthetic designs are protected for 15 years and functional designs are protected for 10 years. You will also have to renew the registration each year before the expiry of the third year since the date of application.
Registering a trademark allows a name to become closely associated with a product. By registering your trademark you are able to prevent competitors from using it. Applications for a trademark can be lodged in 45 different classes, depending on the goods and services for which you will be using the trademark. More information about the international classification system is available on the World Intellectual Property Organisation’s website and you can
register your trademark through the CIPC.
While you are working through the legalities, keep one thing in mind: An idea alone is not worth much. What matters is how you implement it. Getting on with the business is the key to success. Being able to implement the idea and deliver the product, service or information every day is what matters. Get started on establishing your business and creating paying customers.
Next time we’ll cover registering with SARS, applying for permits and getting business insurance