Results 1 to 7 of 7

Thread: Do I start a company or become an employee?

  1. #1
    New Member
    Join Date
    Dec 2019
    Location
    Johannesburg
    Posts
    2
    Thanks
    2
    Thanked 0 Times in 0 Posts

    Do I start a company or become an employee?

    I work for a small company that recently entered into a JV with another company. My employment is set to be moved to the now new "JV company". The scope of my job has also changed and as a result there may be an opportunity for me to do work for multiple related companies.

    Is it better for me to start my own company and to invoice the entity monthly (on the basis that I will be invoicing other entities as well)? Or should I just become an employee of the new JV company?

    Does anyone have any insight into which is the most tax efficient route?

    Also, what do I risk losing from going to employee to director of my own company with a committed monthly income considering I have vehicle and home financed in my personal capacity?

    Any and all advice will be appreciated.

    Thank You!

  2. #2
    Diamond Member
    Join Date
    Mar 2010
    Location
    Cape Town
    Posts
    6,329
    Thanks
    426
    Thanked 978 Times in 795 Posts
    This is like asking whether you should buy a sedan or a bakkie. You need to figure the upsides and downsides out for yourself in you own situation. If you don't have serious "balls" to ride the hard times then going on your own might be really problematic.

  3. Thanks given for this post:

    Bilbo (12-Jan-20)

  4. #3
    Diamond Member Blurock's Avatar
    Join Date
    May 2010
    Location
    Durban
    Posts
    4,151
    Thanks
    758
    Thanked 886 Times in 735 Posts
    Blog Entries
    7
    My first question would also be; "Do you have the balls to start your own company?"
    As Adrian had intimated, you need discipline, the will to succeed, the skill to survive and the ambition and innovation to be successful.
    Are you prepared to 24/7/365? Are you prepared to take responsibility for everything that happens in your day?
    Remember, you ARE the business. Whatever you say or do impacts on your bottom line. There is no boss to run to.

    Now that I've scared you off - being your own boss and doing your own thing can be hugely rewarding and may send you in a complete different direction, once you are able to see and grab the opportunities. Good luck!
    Excellence is not a skill; its an attitude...

  5. Thanks given for this post:

    Bilbo (12-Jan-20)

  6. #4
    Diamond Member Blurock's Avatar
    Join Date
    May 2010
    Location
    Durban
    Posts
    4,151
    Thanks
    758
    Thanked 886 Times in 735 Posts
    Blog Entries
    7
    So you have chosen the safe option of being an employee?
    Excellence is not a skill; its an attitude...

  7. #5
    New Member
    Join Date
    Dec 2019
    Location
    Johannesburg
    Posts
    2
    Thanks
    2
    Thanked 0 Times in 0 Posts
    No.

    Rather ignorantly, I came to this forum seeking specific advice and guidance on a simple tax efficiency question. Instead I was questioned (twice) about my genitalia and appetite for risk.

    I then went on to seek professional advice on what I specifically asked for and received the answers I wanted.

    I also googled the different types of risk associated with the different company set ups in South Africa and chose a suitable way forward for me.

    Thanks for the push and encouragement though! Just what the country needs.

  8. #6
    Diamond Member Blurock's Avatar
    Join Date
    May 2010
    Location
    Durban
    Posts
    4,151
    Thanks
    758
    Thanked 886 Times in 735 Posts
    Blog Entries
    7
    Quote Originally Posted by Bilbo View Post
    No.

    Rather ignorantly, I came to this forum seeking specific advice and guidance on a simple tax efficiency question. Instead I was questioned (twice) about my genitalia and appetite for risk.

    I then went on to seek professional advice on what I specifically asked for and received the answers I wanted.

    I also googled the different types of risk associated with the different company set ups in South Africa and chose a suitable way forward for me.

    Thanks for the push and encouragement though! Just what the country needs.
    Good luck with your career, Bilbo. Keep us posted as to what worked for you.
    Excellence is not a skill; its an attitude...

  9. #7
    Silver Member
    Join Date
    Sep 2012
    Location
    Louis Trichardt
    Posts
    334
    Thanks
    58
    Thanked 43 Times in 39 Posts
    Bilbo,

    Tax wise if you had to register a company, you would get very favorable rates if you are classified as a small business corporation. One of the very first requirements are that you should have at least 3 employees that are not connected persons (read relatives).

    If you comply with this requirement, then it might be worth it tax wise to invoice the companies.

    To work as a sole proprietor you will be taxed at the same rates as an employee, but you can deduct a few other expenses. But I must warn you, SARS WILL audit you, so you have to be ready with all supporting documents ie invoices, logbooks etc.

    I hope this gives you an idea of where to start.


    Sent from my iPhone using Tapatalk

Similar Threads

  1. [Question] debt by company to employee without my knowledge please help
    By oakley69 in forum Labour Relations and Legislation Forum
    Replies: 1
    Last Post: 25-Jan-17, 11:19 AM
  2. [Question] Cannot start a new company in Pastel Xpress
    By marcestroh in forum Accounting Forum
    Replies: 0
    Last Post: 11-Dec-15, 10:00 PM
  3. [Question] When should a company register me as an employee with SARS?
    By stellenboscher in forum Tax Forum
    Replies: 3
    Last Post: 26-Feb-14, 10:18 PM
  4. Traffic fine by employee using company vehicle
    By SSS100 in forum General Regulatory Compliance Forum
    Replies: 2
    Last Post: 20-Jan-13, 01:29 PM
  5. [Question] What are the requirements needed to start your own security company?
    By jdg1868 in forum General Business Forum
    Replies: 17
    Last Post: 04-Jul-11, 05:01 AM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •