Statutory and CIPC compliance

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Running a business as a sole proprietor means running the business in your personal capacity where there is no separate legal entity for the business. This can be an effective way to start out a business as there is less admin required than with a registered company. However an important distinction is that as there is no separate legal entity, any debts and obligations of the business will be the responsibility of the sole proprietor in their personal capacity.

Registering a company with the CIPC establishes the company as a separate legal entity that will conduct the business. The owners of the business will own shares in the business and will appoint directors to run the business.

The company is required to comply with the Companies Act which places various responsibilities with the directors of the company, such as the requirement to prepare annual financial statements.