How to set up a new company: An introduction

How to set up a new company: An introduction

Can I set up a new company myself?

Yes. You do so by sending an application to Companies and Intellectual Property Commission (CIPC), which you can do:

Online or by post. Doing this online is by far the easiest and most simple option.

Alternatively, you can have a company formation agent or lawyer to set up a company for you. It will however be cheaper if you do it yourself and, even if you use an agent or lawyer, you will still need to provide them with details about your new company, so if you can manage the CIPC website, we would recommend doing it yourself. 

Whichever method you choose, our solution contains everything you are likely to need as you manage your setup and ongoing legalities.

Over and above this, you will need to:

  • choose a name for your company;
  • choose a registered office;
  • choose the right codes to describe your main business activities from a list on the CIPC website;
  • decide whether to have a company secretary;
  • choose the directors for your company;
  • decide how many shares you will have and who will get them;
  • identify any people with significant control over your company;
  • approve a memorandum of association for your company;
  • choose articles of association for your company. There are model articles that many companies use when first incorporating, although you can have a bespoke set of articles professionally drafted for you if you want via the Lacoona platform;
  • complete and file an application form, either online or in paper form; and
  • pay the necessary fee.

It is also sensible, where you have more than one shareholder, to consider entering into a shareholders’ agreement or founders’ agreement at the time you set up your company. For guidance, see Shareholders’ agreements and for a template you can use, see Shareholders’ agreement, Founders’ Agreement or a Partnership Agreement.

Q6: Which method should I use to set up my new company?

Online is the cheapest and quickest way for you to set up a new company, but your company must meet some basic criteria to be eligible for the online incorporation service. The criteria are different depending on whether you want to register with SARS for corporation tax and PAYE at the same time (see Q&A 8) or not (see Q&A 9).

Alternatively, or if your company does not meet the criteria, you can set up your company by completing a form and delivering it either by post or by using the same day service.

For a table comparing the different methods of incorporation, see Comparison of different methods of incorporation.

For guidance on setting up a company online, see Q&A 7.

For guidance on setting up a company by post or by using the guaranteed same day service, see Q&A 10 and Q&A 11.

Setting up a company online

Q7: How do I set up a new company online?

You can set up a company online by completing and submitting an online form. 

The form can be edited, saved and completed in separate visits to the website. Once it has been submitted, your online application form will be reviewed by CIPC. If everything is in order, they will send you an email confirming that your company is incorporated. CIPC aims to process online applications within 7 working days. In many cases, online applications can be processed within 24 hours, but this is not guaranteed.

The fee for applying online is R125, cheaper than any other method.

  • For details of the information you will need to include in your online application, see Q&A 2.

For a step by step guide to setting up a company online, see either:

  • Step-by-step guide to incorporation(online including registration with CIPC) for guidance on the service to register your company online and with CIPC simultaneously on their website (see Q&A 8); or
  • Step-by-step guide to incorporation (online basic incorporation only) for guidance on the service to register your company with CIPC (see Q&A 9).

Q8: Can I set up a new company online?

Yes, so long as:

  • your new company is not taking over another business (eg. buying another company or business, or changing from self-employed status (also known as sole trader) to trading through a company);
  • none of your new company’s directors or persons with significant control have taken steps to stop their home address from being made public due to the risk of threats or violence (see Q&A 19); and
  • you can pay the necessary fee of R125 by card or by EFT.

For details of the information you will need to include in your online application, see Q&A 2.

To set up a new company online and register with CIPC at the same time, you should use the gov.RSA website. You can use Step-by-step guide to incorporation (online including registration with CIPC) to guide you through the process.

Q9: Can I set up a new company online and not register with CIPC?

Yes, however you should be aware that if you do not choose to register for corporation tax and PAYE when you set up your company, you will need to do so manually after you have incorporated. In most cases, you will therefore save time by registering with CIPC simultaneously (see Q&A 8). Using this option is only likely to be appropriate if you know that your company will not immediately do any business or start trading after it is incorporated.

You will need to pay the necessary fee of R125 by card or Paypal.

For details of the information you will need to include in your online application, see Q&A 2.

You can use Step-by-step guide to incorporation (online basic incorporation only) to guide you through the process.

Setting up a company using the paper form

Q10: How do I set up a new company by post?

Go to www.cipc.co.za and follow the prompts. Unfortunately we cannot help you perform this task. 

The precise time will largely depend on how busy CIPC is at that point in time, as all postal applications need to be manually reviewed and processed. 

Q11: Can I set up a company immediately?

Yes, if you use the CIPC same day service. Complete an IN01 form (see Q&A 3) and deliver it by hand or by courier to CIPC before 3pm on a working day. Same day applications should be made at the relevant CIPC office.

To complete a same day application, you can use the editable pdf version of the IN01 form and either type the relevant information into the form and print it, or print the blank form and complete it by hand. For detailed guidance on completing the IN01 form, see Step-by-step guide to incorporation(paper IN01 form).

If the completed form is delivered to CIPC before 3pm on a working day, they will set up your company on the same day (see Q&A 24). The fee for this service is R100. For a cover letter to accompany your completed IN01 form, see Cover letter to CIPC for paper IN01 form.

Note, although not a guaranteed same day service, the CIPC online service will often process an application on the same day that it is submitted. The fee for this service is R125. For further guidance, see Q&A 7.

Completing the forms

Q12: What form do I need to complete to set up my company?

To set up a company you need to submit an application form to CIPC, also called an IN01 form. This is done either by:

completing and submitting the form online (see Q&A 7 and following); or

completing and submitting a paper form (see Q&A 10).

The form can be completed either by you or by someone else on your behalf, such as a company formation agent that specialises in setting up new companies (see Q&A 13). If you complete the form yourself, it will need to be signed off by your proposed shareholders (see Q&A 15).

For detailed guidance on completing the relevant form to set up your company and submitting it to CIPC, you can use:

Step-by-step guide to incorporation(online including registration with CIPC); or

Step-by-step guide to incorporation(online basic incorporation only) – for guidance on the service to register your company with CIPC only on the gov.RSA website (see Q&A 9)); or

Step-by-step guide to incorporation(paper IN01 form) – for guidance on completing the paper IN01 form (see Q&A 10)).

Q13: How do I get someone to set up my company for me?

The alternative to completing the form to set up your company yourself is to have an agent complete and submit the form on your behalf.

There are numerous company formation agents who will do this for you. CIPC maintains a list of authorised company formation agents. Note that this is simply a list of agents who use the CIPC-authorised software, so the fact a company is included on this list is not an endorsement from CIPC.

Using a company formation agent costs more than completing the form yourself (see Q&A 20), and in practice you will still need to provide the agent all the same information that you would need to provide to CIPC to register the company yourself. For further guidance on using an agent to set up a company for you, see Q&A 14.

Q14: Should I get someone to set up my company for me?

Some agents offer additional services as part of their package (such as a domain name or company bank account) or a more bespoke service, but this will usually come at a higher cost. Always independently investigate the costs of any package; a formation agent offering a bank account, for example, is likely to be receiving a commission from the relevant bank(s) and your choice of accounts will necessarily be restricted.

The fee for using a company formation agent starts at around R15 for the most basic incorporation service. The costs can exceed R100 for a premium or expedited service.

The main benefit of using a reputable company formation agent is that they should be experienced in dealing with CIPC, so will be able to assist with any necessary follow-ups if your application is delayed or rejected for any reason. An agent might also be able to potentially spot mistakes in the information you provide them. This relies on the information you provide being manually checked, however, which is not the case with every formation agency.

Q15: Who needs to sign off the form needed to set up my company?

This depends on who has completed the form and the method of incorporation use:

If you set up online, see Q&A 16.

If you use a paper form (whether using the post or the same day service), see Q&A 17.

If you use an agent to set up the company for you, see Q&A 18.

Q16: Who needs to sign off if I set up my company online?

CIPC has its own online authentication method for you to follow as part of the process.

Your shareholders will need to verify the contents of your application and your memorandum of association, to confirm that the information on the form is correct, that they intend to take shares and incorporate a company, and that the legal requirements for registration have been met.

Q17: Who needs to sign off if I use a paper form to set up my company?

Your shareholders will each need to physically sign both the form and the memorandum of association to confirm that the information on the form is correct, that they intend to take shares and incorporate a company, and that the legal requirements for registration have been met.

Q18: Who needs to sign off if I use an agent to set up my company?

The form will be signed off by the agent on behalf of the shareholders. The agent will ensure it has the necessary authority from your proposed officers and shareholders to incorporate the company.

Q19: Do I need to include personal information when I set up my company?

Normally, you have to give residential addresses for all your directors and people with significant control as well as an address at which they can be contacted (this contact address can be your offices if you want).

CIPC makes the contact addresses public, but keeps the residential addresses private. They can only share the residential addresses with credit reference agencies and some public authorities, like the police.

In limited circumstances, where there is a risk of violence or intimidation to a director or person with significant control, or someone living with them, you can ask CIPC:

  • not to give their usual residential addresses to credit reference agencies; and
  • in the case of persons with significant control, not to make any information public that links them to the company.

How much it will cost to set up a new company

Q20: How much will it cost me to set up a new company?

The cost will depend on the method used:

  • for an online application using either of the two web forms, the cost is R125;
  • if you use a company formation agent, the cheapest packages generally start at around R1500 and this can go up to over R5000 for a premium service; and
  • if you use a lawyer, the costs are likely to be significantly higher.

For a table comparing the different methods of incorporation, see Comparison of different methods of incorporation and for further guidance see Q&A 6..

How long it takes to set up a new company

Q21: How long will it take me to set up a new company?

This will depend on the method used.

If you set up online, see Q&A 22.

If you use the post, see Q&A 23.

If you use the same day service, see Q&A 24.

If you use an agent, see Q&A 25.

In summary, the same day service is the only service that guarantees your application will be processed on the day your application is submitted. Many online applications are processed within 24 hours, but this is not guaranteed. Post is the slowest method, taking between two to ten working days for processing.

Q22: How long will it take me to set up a company online?

For either of the two ways to set up online (see Q&A 7), CIPC aims to process applications within 7 working days. In many cases, online applications can be processed within 24 hours, but this is not guaranteed.

Q23: How long will it take me to set up a company by post?

For a hard-copy paper application by post (see Q&A 10), the processing time is longer than online. CIPC offers an estimate of 2 to ten working days for processing postal applications once the requisite information has been received. The time will largely depend on how busy CIPC is at that point in time, as all postal applications need to be manually reviewed and processed.

Q24: How long will it take me to set up a company if I use the same day service?

There is an expedited service for hard-copy paper applications.

These can be delivered in person or by courier to the relevant CIPC office.).

If CIPC receives the application before 3pm, they can process it and issue a certificate of incorporation that same working day. The fee for this service is R100.

Q25: How long will it take me to set up a company through an agent?

An application submitted via a company formation agent will usually be processed in a similar time frame to an online application (see Q&A 22), but this can vary and you should check with your agent first. Some formation agents offer an (expedited) same day service with a higher fee.

First steps after a company has been set up

Q26: How do I know when my company has been set up?

You get a notification from CIPC to confirm when your company is set up.

This will be by email if you apply online, or by post if you submit the hard-copy paper form.

From a legal perspective, your company only comes into existence when it is registered and CIPC has issued a certificate of incorporation. You should bear this in mind before ordering any signage, marketing material, or stationery for your company, or buying any domain names – just in case your proposed name is rejected for some reason. If you want to open a business bank account in your company’s name, you will also need to wait until the certificate of incorporation has been issued.

Q27: When will I receive my certificate of incorporation?

If you apply online, you will receive by email a pdf version of your certificate of incorporation confirming your company number and name, within two days of CIPC confirming that your application has been successful.

If you use the postal incorporation service, you will receive a hard copy certificate of incorporation by post.

If you use a company formation agent to set up a company on your behalf, you will receive either a pdf version or a hard copy certificate, depending on which method of incorporation they use on your behalf.

Q28: What should I do with my certificate of incorporation when I receive it?

Your certificate of incorporation is an important legal document. It is conclusive evidence that your company has been incorporated and will be required by a bank when you open a business bank account. Any professional advisers your company uses will normally also need a copy for identification purposes.

The certificate of incorporation will list the name and registered number of your company, the incorporation date, the location of your registered office, whether it is a limited or unlimited company and whether it is a private or public company.

From a legal perspective, there is no difference between a pdf certificate or a hard copy certificate.

Q29: How can I get a replacement certificate of incorporation?

If you ever lose your certificate of incorporation, a copy of your certificate of incorporation is available in pdf form on the CIPC public register and you can request a hard-copy from CIPC by contacting the CIPC contact centre.

Q30: When will I receive my company authentication code?

Your should receive your company authentication code by post at your registered office address, usually within a week of your company being incorporated. You will need this code in order to file documents online on the CIPC website (see Q&A 31).

Q31: What should I do with my company authentication code when I receive it?

You should make sure you keep a record of your company authentication code, as you will need to enter it each time you want to file a document online on the CIPC WebFiling service. The authentication code acts as an electronic signature for your filings, so you should also keep it confidential to prevent unauthorised online filings being made.

If you have lost your company authentication code, or are not sure what it is, you can ask for it to be re-sent to your registered office address. For guidance, see Q&A 32.

Q32: What should I do if I do not know my company authentication code or do not receive it?

If you do not know your company authentication code or do not receive it after your company is set up (see Q&A 30), you can ask CIPC to post it to your registered office address again.

You can do this by logging into the CIPC WebFiling service and clicking the appropriate link to request an authentication code reminder. CIPC should then send your authentication code by post to your registered office address within two working days.

Q33: When can my company start trading?

Your company can begin trading from the date of incorporation, as listed on your certificate of incorporation.

Q34: Once my company has been set up, what are my initial legal obligations?

There are several strict legal requirements during the early days of your company which it is important you keep in mind as they can be easily missed.

Some of them constitute offences if you fail to comply and frequently result in fines being levied against the company itself and sometimes individual directors and others at fault.

More particularly:

Filing documents at CIPC

Your company must file annual accounts and a confirmation statement at CIPC every year, even if it is not trading or is dormant. For detailed guidance, see Annual filings, accounts and reports, and for a handy guide, see Quick guide to company books, records and filing.

Failure to do so is an offence resulting in an automatic fine. Continued failure can result in your company being struck off the register.

Keeping proper records

Your company must set up several statutory registers (e.g. a register of directors and a register of people with significant control), and maintain proper company records (e.g. keeping minutes of general meetings and records of shareholders’ resolutions). For further guidance, including template Company registers you can use for your company, see Maintaining a company’s books and records.

Failure to keep or maintain proper records is an offence punishable by a fine against the company and/or any officer at fault.

Registering for corporation tax, PAYE and VAT

If you have not already, you must register your company with SARS for:

  • corporation tax within three months of it starting to do business;
  • PAYE if your company takes on qualifying employees ; and
  • VAT if your company’s sales which are subject to VAT cross the relevant threshold.

It will likely be sensible for you to register for VAT straight away, even before you have crossed the threshold, so that your company can claim back VAT on goods and services it buys. Your accountant can advise on this.

Displaying your company’s details

Your company must display its registered name at its registered office and any other place where it carries on business.

Your company’s registered name and various other details, including its registered number and office, must also be on its correspondence and website.