Small business help

[geraldenek]

The following are the requirements that should be met in order to qualify as small business corporation:

Shareholders and members must be natural persons and must hold the entire shareholding during the entire year of assessment.
The gross income for the year of assessment may not exceed R14 million.
Not more than 20% of the gross income (receipts, accruals and all capital gains) of the company or close corporation must consist collectively of investment income and income from the rendering of a personal service.

Personal service means:
Any service in the field of accounting, actuarial science, architecture, auctioneering, auditing, broadcasting, brokering, commercial arts, consulting, draftsmanship, education, engineering, entertainment, health, information technology, journalism, law, management, performing arts, real estate, research, secretarial services, sport, surveying, translation, valuation or veterinary science.
Which is performed personally by any person who holds an interest (ie. member of close corporation or shareholder of company) in the company or close corporation referred to in the definition of small business corporation.

Investment income means:
Income in the form of dividends, royalties, rental, annuities, or similar nature. Income in the form of proceeds derived from investment or trading in financial instruments, marketable securities or immovable property.
Shareholders or members may not at any time during the year of assessment hold any shares or interest in any other company or close corporation (other than a listed company, unit trust, share block company, or sectional title body corporate).
The company or close corporation must not be an employment company.

If you are engaged in the provision of personal service you will have to maintain at least 3 full time employees (none of whom may be a shareholder or connected person in relation to the shareholder) for core operations