If you are starting a business you may need to submit a business license application before you can start to trade.
Businesses That Require Licence To Operate In South Africa
The Business Act 71 of 1991 governs which businesses need a trade license. Although not all businesses require one, there are certain types of business which may not trade without a proper business licensing:
- Health facilities: Health clinics, spas, saunas, and public baths as well as facilities that provide massage, laser, and ultraviolet treatments
- Food providers: Places that serve food, provide takeaways or transport meals, including hawkers who sell food
- Entertainment facilities: These include cinemas, nightclubs, pool rooms and arcades, as well as a business that has three or more vending or slot machines
- Escort agencies
- Adult shops
Businesses excluded from requiring a trade license
According to the Business Act there are certain businesses from the list above that are excluded from needing a business license. These include:
- A business which is conducted by the State or a local authority.
- A business which is conducted by a charitable, religious, educational, cultural or agricultural association, organisation or institution of a public nature, if all profits originating from the business are devoted entirely to the purposes of that organisation.
- A business which is conducted by a social, sports or recreation club (non-proprietary club) that offers its members or sells food on the business premises
- A business that prepares and sells meals in a private dwelling
If your business is not included in the Business Act for requiring a trade licence then you do not have to apply for one.
How do I apply for a trade licence?
Your application for a trade license will be dependent on the location of your business. You would then apply to a metropolitan council, local town council or an area district counsel, dependant on your area.
Depending on the type of business that you are setting up, you may also need to comply with additional requirements:
Zoning
Zoning regulations are laws defining how you can use your property. Check your title deed to see whether or not your property qualifies for the relevant business rights.
Once you have determined the zoning of your property your next step is to visit the Town Planner responsible for your area. The Town Planner will let you know whether you need to apply for consent use or the re-zoning of your property.
Common land-use or zoning categories include:
- Residential zones: Such as single residential dwellings, group housing schemes or blocks of flats
- Open space zones: These include public open spaces, parks, sports fields, cemeteries or private open spaces
- Business and commercial zones: Such as shops or office blocks
- Industrial zones: Factories, motor repair garages or warehouses
- Government zones: Areas reserved for government buildings
- Agricultural zones: Farms
- Special use zones: For example petrol stations
Health
If your business serves food or drink to the public you will have to comply with laws that make sure your food is safe for consumption.
Regulations generally differ from area to area so to find out exactly what you need to do for your business, contact your local municipality and enquire about how to comply.
A certificate of acceptability
If your business is involved in the provision of food then you are required to have a ‘Certificate of Acceptability’. Until such time as you have the necessary certificate no person on your premises may handle food. If you are found to be preparing and selling food without the certificate then you may be liable to a fine.
The Certificate of Acceptability must be in the name of a natural person who is responsible for the food premises, or the owner of the food premises. The Certificate of Acceptability is not transferable from one person to another or from one premises to another.
Liquor license
Liquor licenses are divided in three distinct categories:
- On Consumption Liquor License: Liquor sold can only be consumed on the premises and may not be removed from the premises.
- Off Consumption Liquor License: Liquor sold can’t be consumed on the premises.
- Distributors Liquor License or Wholesale Liquor License: Liquor can only be sold to licensed establishments like liquor stores and pubs
If your business is planning on selling alcohol then you will have to apply for a liquor licence. You can contact the liquor officer at your nearest police station or alternatively contact theLiquor Board.
The National Liquor Authority (NLA) deals with the processing of applications for macro manufacturing and distribution of liquor. It is also responsible for conducting inspections and investigations to ensure compliance with the liquor act. The requirements of licenses may differ from province to province.
You can only apply for your liquor license on the first Friday of every month. These dates are advertised on the Government Gazette and should you miss one of these dates the lodgement of your license will be delayed by a month.
To apply for your business liquor license you must reside in South Africa, have no criminal record, or be insolvent. If you are not going to be present at your premises at all times then a manager must be appointed to oversee the business in your absence.
You also need to display the liquor license in a conspicuous place on your premises. It is even advised that you attach your proof of payment to your business liquor license.
In Gauteng your business premises must visibly display the name of your business, type of business, type of liquor license that you hold, operating times as well on the liquor license number on either the front door or window of your premises. You liquor license must be renewed annually.
Music rights
If you are going to be playing music from your premises even in the background, then must apply for a license from The Southern African Music Rights Organisation (SAMRO), as well as a license from The South African Music Performance Rights Association (SAMPRA).
You will have to apply for two separate licenses as they are separate divisions. SAMRO is responsible for the copyright in a song (the music and lyrics), whereas SAMPRA covers the copyright in the recorded version of a song.
Once you have applied for licenses from both of these organisations you can then apply to the South African Music Rights Organisation (SAMRO) for music rights. You can contact them on:
- Tel: 011 712 8000,
- Email: customerservices@samro.org.za