South Africa: Operating a Business

Enterprises Federation

National African Federated Chamber of Commerce and Industry (NAFCOC)

Search a Company or a Financial Report

CIPC, Companies and Intellectual Property Commission

Business Setup Procedures

For Further Information

Consult Doing Business Website, to know about procedures to start a Business in South Africa.
The Register of Commerce

1. a certified copy of the memorandum of association of the company,

2. a notice of the registered office and postal address of the company;

3. the consent of, and the name and address of, the auditor of the company in South Africa;

4. a notice of the name and address of the person resident in South Africa who is authorised by the company to accept, on the company's behalf, all service of processes and notices.

Thereafter, the Registrar will register the company, allocate a registration number to the company concerned and issue a certificate of registration to the company. Private companies do not have to lodge their annual financial statements with the Registrar. -->

The Competent Organization

Companies and Intellectual Property Registration Office

Recovery Procedures

Principle

The Insolvency Act (which regulates bankruptcy of companies in South Africa), entitles creditors to apply to court for recovery purpose (even if actual insolvency has not been proved).

Certain creditors may be secured, such as the mortgagees of mortgage bonds over immovable property of the insolvent or the holders of book debts/recoverables. Other creditors may have preferred claims, such as the claims of employees for outstanding wages and the revenue authorities for arrear taxes. Creditors without secured or preferred claims are treated as concurrent creditors and only share in whatever excess remains after payment of secured and preferred creditors.

Investors who choose to acquire equity in the company rather than simply loaning money to the company are not regarded as creditors at all and accordingly are unlikely to receive anything. Foreign creditors are treated in the same manner as local creditors.

Minimum Debt-to-Capital Ratio Triggering Liquidation

Not applicable

Bankruptcy Laws

Insolvency Act

Companies Act 1973

More information visit : Department of Justice & Constitutional Development

Reorganization and Rehabilitation Laws

A liquidator is appointed to supervise the winding up of an insolvent company. The liquidator acts according to the directions of creditors who have proved claims, and are also subject to supervision by the Master of the High Court in the applicable jurisdiction. It is also possible for companies to be placed under judicial management if they are in financial difficulty. The purpose is to allow the company to trade itself out of financial difficulty.

Source: South African Department of Labour

For Further Statistics

Statistics South Africa

For Further Information About the Labor Market

South Africa Labour Law Profile

Opening Hours

 

• Legal Weekly Duration

45 hours in a week or 9 hours in a day. For employees who work a 6-day week, it is 8 hours per day.

• Maximum Duration

10 hours per week and not exceed 3 hours of overtime per day.

• Night Hours

6 o’clock in the evening till 6 o’clock the next morning

Working Rest Day

The rest period must include a Sunday unless otherwise agreed.

Paid Annual Vacation

Leave period of at least 21 consecutive days per completed year of employment (or 1 day for 17 day’s worked, or 1 hour for 17 hours worked), on full pay. Leave accumulation from one year to another not allowed.

Retirement Age

The retirement age is 65 for men and 60 for women.

Child Labor and Minimum Age For Employment

15 years of age or under the minimum school-leaving age.

Informal Labor Market

The informal employment sector (excluding agricultural sector) is substantial. In the year 2006, it accounted for 17.6% of the total employed work force.

Pay

Minimum Wage

South Africa does not have a national minimum wage, but the Minister of Labour can make sectoral determinations, which may include a basic remuneration level. Legislation differentiates between urban and rural areas.

Average Wage

Average monthly gross earnings in South Africa is ZAR 8,500 (USD 1,100).

Other Forms of Pay

• Pay For Overtime

50% more than the regular wages.

• Pay For Rest Days Worked

100% more than the regular wages, if the employee does not normally work on Sundays, Otherwise 50% more than the regular wages, if the employee does normally work on Sundays.

• Pay For Night Hours

Paid extra, %age varies depending on nature of work.

• Pay For Overtime at Night

Paid extra, %age varies.

Social Security Costs

The Areas Covered

Pension fund contributions 14%, Occupational injuries insurance contribution 1.6%, Unemployment Insurance Fund. For more information, consult the Social Security Program in South Africa from the U.S Social Security Administration's website.

Contributions

Contributions Paid By the Employer: 1%
Contributions Paid By the Employee: 1 %.

Competent Organization

South African Insurance Association
South African Social Security Agency
Department of Social development

Recruitment

Method of Recruitment

The various methods of recruitment used by companies in South Africa are :
1.Advertising
2.Direct recruitment
3.Employment Exchanges
4.Educational Institutions

Recruitment Agencies

There are mainly three types of recruitment agencies available in South Africa :

- Employment Exchanges (Public)

-Employment Agencies (Private)

-Labour Contractors ( Private )

Recruitment Websites

Jobs
Jobs-at-large
Career Web
Kellysearch
Slackalice

The Contract

Dispute Settlement

Social Partners

Social Dialogue and Involvement of Social Partners

For effective bargaining, South Africa has Bargaining Council system. Bargaining takes place between the employers and trade unions under the auspices of the Bargaining Council. The collective agreements concluded in the Bargaining Council bind only the parties to the Bargaining Council.

The Congress of South African Trade Unions (COSATU) is the largest and most effective trade union in South Africa. It is affiliated with the African National Congress (ANC) and the South African Communist Party. COSATU represents 21 national industrial affiliates.

Unionization Rate

30% (approximately)

Unions

COSATU (Congress of South African Trade Unions)
FEDUSA (Federation of Unions of South Africa)

Regulation Bodies

Department of Labour, Government of South Africa