Keep your company above board

Benefits accrue from registering your business, but one of the most important is that registration opens doors when you apply for finance.

Benefits accrue from registering your business, but one of the most important is that registration opens doors when you apply for finance.

Most financial institutions are more likely to consider your application for finance if you are registered.

Registering your business shows you are professional and committed to what you want to do, that you are a law-abiding citizen and you are willing to pay tax.

The law requires you to pay tax on any income you receive. Registering will indicate your intention to pay tax, but you still need to register with the South African Revenue Service.

You need a company registration number and a VAT registration number to show that your business pays value-added tax.

You also need to register your business before conducting transactions such as applying for a business phone.

You become a separate entity from your business, which means that your personal assets are safe if your business fails to pay its debts. Registering your business as a company or a close corporation limits your legal liabilities, meaning the owners are usually not liable for the business's debts, unless your creditors can prove negligence. That prevents you from acting haphazardly and encourages you to be honest.

Registering your business might also open doors to opportunities such as applying for government tenders.

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