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Thread: Business venture

  1. #1
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    Business venture

    Hi all. New to the forum and just getting into the swing of things. Looking for a bit of advise. I have the opportunity to sell a great product but dont know if I should reg a cc yet? Am i jumping the gun? If I sell to retailers they going to want a VAT number. I have saved up for a while to get this started and i want to do it right. PLz help...

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    In my opinion, the main reason to register a cc is to protect your own private assets in case your business fails, which despite your enthusiasm at the start, is still a highly likely outcome. It does become a trade off with costs and depends on how much you plan to sell. For small amounts, the cost and hassle of running a cc will not justify setting it up.

    You can't get a VAT number just because you have a cc ( a sole proprietor can get a VAT number too anyway). Rather you have to prove to SARS that your sales are going to be a couple of R100k in a year. Nowdays I believe they want proof, not promises. So you either need to start off not being registered until the orders start flooding in and then apply for a number and start charging VAT, or you need signed contracts from your customers.

    If you do get a VAT number then rather setup a cc as it can complicate your private finances if you don't.

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    I would go first for the CC. Depending on your turnover, VAT is optional.

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    Quote Originally Posted by Andrew_ZA View Post
    I would go first for the CC. Depending on your turnover, VAT is optional.
    What do you mean by VAT is optional?

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    It is optional to register your cc for VAT up to a certain annual turnover. Once you exceed that amount however, you have to register. It used to be R300k. I think its since change though.

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    Quote Originally Posted by BusFact View Post
    It is optional to register your cc for VAT up to a certain annual turnover. Once you exceed that amount however, you have to register. It used to be R300k. I think its since change though.
    Registering for VAT is optional up to an annual turnover of R1 million at the moment. Once your annual turnover is over R1 million per annum, you must register for VAT.
    The trouble with opportunity is it normally comes dressed up as work.

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    What effect do small businesses have on the public and larger corporations around South Africa?

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by Charlie D View Post
    What effect do small businesses have on the public and larger corporations around South Africa?
    Would you mind expanding on your line of thought in asking?

    Small business makes up a significant chunk of the economy, so from that point of view there is a clear importance/effect. But when it comes to influence, as in influencing public or corporate perception... I reckon typically not so much.
    Last edited by Dave A; 02-Mar-11 at 11:35 AM. Reason: typo
    The trouble with opportunity is it normally comes dressed up as work.

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    Smile Business Venture

    Quote Originally Posted by NTLTL View Post
    Hi all. New to the forum and just getting into the swing of things. Looking for a bit of advise. I have the opportunity to sell a great product but dont know if I should reg a cc yet? Am i jumping the gun? If I sell to retailers they going to want a VAT number. I have saved up for a while to get this started and i want to do it right. PLz help...
    Hi NTLTL, In my opinion, good advise from Dave A and TFSA. It appears as if you will be working alone? You only need to register for VAT once turnover reaches R1mil. As a sole proprietor you do not need to register a cc. As a new venture this may add to your expenses for separate bank accounts, accounting etc. Just make sure you keep proper records for your own peace of mind. Once you are sure that the venture will be successful, you can formalise the business if that will bring any added benefit.

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    If I gather correctly. I dont need to have a name for my company yet, or trade under something to trade? Would that not seem unprofessional? What happens to purchasing expenses and marketing in regards to tax rebates? Do I simply just save up receipts for all that as you normally would if you hade a cc? I got too many questions to ask as I am inexperienced, but eagar to learn. Thanks for all your responses. Didnt think I would get many.

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