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We continue our three part miniseries of (Entrepreneurship For Dummies) in this post where we will breakdown all of the Wesgro 2019 report of Ease of doing business in South Africa but before we do. I would like to start by defining the definition of the word (Entrepreneurship as spelled out by Google and how South Africans view the term) so without any further ado, let’s get started.

Google Definition:Entrepreneurship is the activity of setting up a business or businesses, taking on financial risks in the hope of profit”.

South Africa Definition:An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying all of the rewards. They are commonly seen as an innovator, a source of new ideas, goods, services, and business procedures”

Now that we understand the definition of the word we can move on to breaking down the Wesgro report in more depth. First is the business infrastructure which is crucial when small business owners start in a country that has a high failure rate percentage.

Companies and Intellectual Property Commission

Previously known as CIPRO which was established in 2002 following the merger of the South African Companies Regulatory Office (SACRO) and the South African Patents and Trademarks Office (SAPTO) in 2001.  When the 2008 Companies Act came into effect on 1 May 2011, the CIPC was created from the merger of CIPRO and the office of Company and Intellectual Property Enforcement (OCIPE).

The CIPC does more than just allow an entrepreneur to register a business it can also do the following:

  • Register Trademarks, patents, and copyright
  • Promote education and awareness of Company and Intellectual Property Law
  • Prompt compliance with relevant legislation
  • Enforce relevant legislation
  • Monitor compliance with, and contraventions of financial reporting standards, and make recommendations thereto to Financial Reporting Standards Council (FRSC)
  • Licensing of Business Rescue Practitioners
  • Report, research, and advise the Minister on matters of national policy relating to the company and intellectual property law.

Interesting information about the functions of CIPC but we will be doing an in-depth article dissecting what all that means as well as how to use it to your benefit and further expand your business.

Their services can be accessed online by creating a Customer Login (Customer Registration).

For our full in-depth three part miniseries on CIPC you can read it by click on the following Part 1, Part 2 & Part 3

Small Business Tax

It is important to understand the small business tax structure as it allows the maximisation of profit – a legal way to not pay huge amounts of taxes to the government.

What is Small Business Corporation tax (SBC) and how does it affect you?  It is a tiered tax structure that helps to determine how much is going to the taxman and how much stays in the business at the end of the financial year.

There are 4 tiers to small business tax in South Africa and it scales from 0% to 28% respectively. It is fairly simple to understand as SARS provides a table. The example values indicate profit before tax (Income – Expenses = Gross Profit) – this changes every year immediately after the Finance Minister delivers his Budget Speech.

R0 – R67 111 0 %
R67 112 – R365 000 7 % above R67 111
R365 001 – R550 000 21 % Above R365 000
R550 001 and above 28 % Above R550 000

The table is fairly straightforward to understand and indicates how to calculate the liability percentage.  If the Gross Profit earnings fall into level 4, then all the previous levels are included (not straight to 28% as is normally the case).

The following examples are questions posed when completing an entity’s Annual Tax Return and also contribute to its tax designation and whether the entity qualifies for SBC tax:

Example 1

When the Gross Income/Sales is less than R1 million, then the return type is automatically designated as MICRO BUSINESS.  Above R1 million the return type will change to SMALL Company.

Example 2

Example 3

Clause s12E is a detailed explanation of what qualifies and disqualifies a business for SBC tax and includes the definition of a Personal Service Provider?  For a more simplified explanation visit

Small business Legal

Most entrepreneurs do not understand the value of putting legal contracts in place to protect themselves and their businesses. There are four important legal documents that every entrepreneur needs:

Employment Contract

An employment contract is between an employer & employee used to attribute rights and responsibilities between parties.  

NOTE:  The Employment Contract may not supersede or contradict the BCEA (Basic Conditions of Employment Act).

Example: Business X expands and starts employing staff to whom specific tasks are designated.  The Employment contract will confirm the employment, indicate the annual/monthly salary, and whether a 13th cheque or bonuses are applicable.  It will also indicate days and hours to be worked, leave (sick, annual, etc.).  Some will include basic policies and procedures if a full SOP (see below for definition) is not in effect.  This eliminates any confusion or expectations by the employee.

Standard Operating Procedure (SOP)

An SOP is a procedure specific to your operation that describes the activities necessary to complete tasks following industry regulations, provincial laws, or even just the standards for running your business.

Example: Step-by-step instructions on how to perform a particular business activity, such as manufacturing or record keeping. Although most SOPs are presented as text documents, they can also contain images or videos to help clarify their instructions.

Non-Disclosure Agreement

A legally enforceable contract that creates a confidential relationship between a person who holds some kind of trade secret and a person to whom the secret will be disclosed and the type of information covered is virtually unlimited. This can also be issued to employees as part of their Employment Contract.  The document typically serves three key functions:

  1. Protect sensitive information. By signing an NDA, participants promise to not divulge or release information shared with them by the other people involved. If the information is leaked, the injured person can claim a breach of contract.
  2. In the case of a new product or concept development, it can help the inventor keep patent rights. In many cases, public disclosure of a new invention can void patent rights. A properly drafted NDA can help the original creator hold onto the rights to a product or idea.
  3. Expressly outline what information is private and what’s fair game.  In many cases, the agreement serves as a document that classifies exclusive and confidential information.

Service Level Agreement 

A service-level agreement defines the level of service expected from a vendor, laying out how a service is measured as well as remedies or penalties should the agreed-on services levels not be achieved.

In our last and final post for the (Entrepreneurship For Dummies) series, we will explore the remaining business infrastructure from the Wesgro report so stay tuned for our final post that will give rise to a more in-depth article that will aid South African entrepreneurs on their path to success.

Yvette Pugin

Yvette Pugin


A force to be reckoned with: Qualified Senior Bookkeeper with 40 years experience in Administration, both in Corporate and the SME space. Having started working in the 1980’s when computers were still a dream; her experience was gained with manual systems. After working with SME Suppliers in the corporate environment, it became apparent that there is a need for not only education, but system management for SME’s.