So I've read all the interpretation notes from SARS on the what a personal service company is, and I understand the tests involved.
I've just registered a new pty ltd company and I plan to start a hosting company specialising in selling hosting products. As far as I can see my company will not be defined as a personal services company. The only thing I am concerned about though is the following paragraph:
I have 1 major client and a few smaller ones lined up. However there is a chance that more than 80% of my income will come from the 1 major client I have. As far as I can see this will not bring me into the definition of a personal services company as long as selling a hosting package is not defined as rendering a service.where more than 80 per cent of the income of such company or trust during
the year of assessment, from services rendered, consists of or is likely to
consist of amounts received directly or indirectly from any one client of such
company or trust, or any associated institution as defined in the Seventh
Schedule to this Act , in relation to such client,
Can anyone confirm my interpretation of this as correct? Would selling hosting be considered as rendering a service?