Sole Trader Registration In South Africa

What is a Sole Trader?

A sole proprietorship, also known as a sole trader ship, individual entrepreneurship, or proprietorship, is a type of enterprise owned and run by

only one person and in which there is no legal distinction between the owner and the business entity.

Sole Trader Registration In South Africa

How to Register a Sole Proprietorship in South Africa?

Registering as a sole proprietorship in South Africa is not difficult at all. There are only four steps to follow. To avoid confusion, it is important to find out the best way to register your company. One should always consult a CPA before starting up officially.

There are two options for registration of sole proprietorship in South Africa. Filing with revenue service or notifying the Master of your trade name. A person has a 6 month period from the date of commencement of business to register a sole proprietorship. The fastest and most common way is to file the F1 form at the nearest office.

What Forms Do You Need to Start a Sole Proprietorship Business?

There are certain requirements you need to take care of to start your sole proprietorship. They are as follows:

  • Form 1, 2, or 9 (declaration)
  • Personal Identification Number (PIN) 
  • Comptroller of Stamps
  • Memorandum and Articles of Association

The Rules for Registering a Sole Proprietorship in South Africa

In South Africa, there are no specific rules for registering as a sole proprietorship. There are some exceptions where an owner will be required to file as a Sole Proprietor and somewhere he/she won’t be required. If you are the only professional in the company, you do not need to file for any qualification certificate. You will also not be required to file particulars of members or share capital. 

How much tax does a sole trader pay in South Africa?

You don’t have to form a corporation to avoid the corporate tax rate. Instead, you can register as a Sole Proprietor. 

The first ZAR 1 to 237,100 is taxed at 18%. From ZAR 237,1001 to 370,500, the rate is 26%.