Frequently Asked Questions: Business Law
Starting & Structuring a Business
What types of business entities can I register in South Africa?
The most common are:
· Private Company (Pty) Ltd – best for most businesses
· Public Company (Ltd) – used for listed companies
· Non-Profit Company (NPC) – used for charities/NGOs
· Sole Proprietorships & Partnerships – simpler, but less protection
How do I choose the right structure for my business?
It depends on your goals. A (Pty) Ltd offers limited liability and flexibility, while a trust or holding structure may be better for asset protection or tax planning. We advise based on your needs.
Can foreign nationals register and own businesses in South Africa?
Yes. Foreigners may own and operate businesses, but must comply with visa, exchange control, and tax regulations.
Contracts & Compliance
Why do I need written contracts if I trust my partners or clients?
Written contracts reduce misunderstandings, protect your rights, and provide legal remedies in case of disputes. The contract becomes evidence in case of any disputes arising and may also strengthen the trust in said relationship by having agreements reduced to writing.
Can Lebese – Cussons Attorneys draft customised contracts?
Yes. We prepare and review shareholders’ agreements, partnership agreements, service contracts, leases, and employment agreements, tailored to your business.
What are the main compliance requirements for South African businesses?
· Annual returns to the CIPC (Companies and Intellectual Property Commission)
· Tax registrations with SARS (VAT, PAYE, Corporate Tax)
· Sector-specific licenses (depending on industry)
· Employment law compliance under the Labour Relations Act
Mergers, Acquisitions & Investments
What is due diligence in a business transaction?
It’s a review of a business’s financial, legal, and operational health before you invest, merge, or acquire. We help identify risks and protect your investment.
Can foreigners invest in South African companies?
Yes. South Africa encourages foreign investment, subject to compliance with exchange control regulations and competition laws.
Do I need approval to merge or acquire another business?
Major mergers/acquisitions may require approval from the Competition Commission to ensure fair market practices.
Disputes & Risk Management
How can I prevent business disputes?
By implementing clear contracts, compliance checks, and governance structures, you minimise risks before problems arise.
Can Legacy-Cussons Attorneys help with debt recovery?
Yes. We assist with commercial debt collection, enforcing contracts, and insolvency proceedings if necessary.
Tax & Cross-Border Issues
What taxes do businesses in South Africa pay?
· Corporate income tax (currently 27%)
· VAT (15%) if turnover exceeds R1 million
· PAYE, UIF, and SDL for employees
· Capital Gains Tax on disposals of business assets
How does cross-border business law affect me?
If your business involves international clients or investors, you must comply with exchange controls, double taxation agreements, and cross-border contract laws.
Can you align my business structure with estate and tax planning?
Yes. We integrate your business with your estate planning, trusts, and succession strategies, ensuring long-term tax efficiency.
Business Legal Compliance
What does “legal compliance” mean for a business?
It means ensuring your business operations follow all laws, regulations, and reporting obligations from company registration and tax filings to labour and environmental laws.
What are the basic compliance requirements for a South African company?
· CIPC: File annual returns and update company records.
· SARS: Register for income tax, VAT (if required), PAYE, and other applicable taxes.
· Labour laws: Comply with the Labour Relations Act, Basic Conditions of Employment Act, and related legislation.
· Sector-specific laws: Licensing, environmental, or health regulations depending on your industry.
What happens if my business does not comply with these requirements?
Non-compliance can result in penalties, interest, deregistration of your company, legal action, or reputational damage.
Do foreign-owned businesses face different compliance requirements?
Yes. Foreign owners must comply with exchange control rules, work visa regulations, and foreign investment reporting obligations in addition to standard business compliance.
How often must I file compliance documents?
· Tax returns: Annually (with provisional tax twice a year).
· VAT returns: Every 1–2 months if registered.
· CIPC annual returns: Once a year.
· Labour compliance: Monthly PAYE/UIF submissions.
What corporate governance requirements apply to South African businesses?
Companies must follow the Companies Act, 2008, which requires proper record-keeping, shareholder meetings, and director duties. Larger companies may also need to comply with the King IV Code on Corporate Governance.
Can Lebese – Cussons Attorneys help with drafting compliance policies?
Yes. We prepare compliance frameworks, internal policies, and reporting from legal risks systems tailored to your industry, ensuring your business is protected.
How does data protection affect my business?
Under the POPIA (Protection of Personal Information Act), all businesses must handle personal data responsibly. Non-compliance can lead to heavy fines.
How can I ensure my contracts are compliant?
We review and draft contracts to ensure they meet South African law, consumer protection standards, and international obligations (for cross-border deals).
Do I need a compliance audit?
Yes, especially if you’re scaling, seeking investors, or entering cross-border markets. A compliance audit helps identify gaps and prevent penalties.
How does labour law affect compliance?
All businesses must comply with employment contracts, workplace safety (OHSA), employee benefits, and termination procedures. Non-compliance can lead to costly disputes at the CCMA.
Can I outsource compliance to Lebese-Cussons Attorneys?
Yes. We provide ongoing compliance monitoring, filings, and advisory services, so you can focus on running your business while we handle the legal framework.