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Leo says: 18 April 2024 at 16:26 I've secured a contract of R3. 1m for two years which is going to be invoiced at R130k per month. Whats the best way to go about this? Should I set-up my business as an SBC or sole proprietor? |
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TaxTim says: 19 April 2024 at 9:37 Entrepreneurs who want to start a business need to be aware of the tax obligations of running a business whether it is in the form of a legal entity (i.e. a registered company) or in their personal capacity. It is also important to note the various options with regard to reducing some of the administrative requirements to make tax compliance easier as well as the different tax incentives and rates that may apply in certain instances. Choosing between a Sole Proprietorship and an SBC depends entirely on you. There are some key differences between a Sole Proprietorship and an SBC. Sole Proprietors: -A sole proprietorship is a business in the name of and operated by one individual. The individual may also call themselves an independent contractor or freelancer. PTY Ltd / Company: -A company is a separate legal entity and may have one or more owners and must be registered with CIPC. A SBC is a special type of company which qualifies for reduced tax rates per special tax tables for SBC's. Please click here to see if your business qualifies as a SBC. We recommend clicking here for more information on the difference between SBC's and sole proprietors. You can also refer to our Small Business Guide for further details. |
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