SMMEs exposed to business legalities
ALEXANDRA - The small, micro and medium enterprises which dominate the business sector in Alex received support to strengthen their legal status.
The small, micro and medium enterprises which dominate the business sector in Alex received support to strengthen their legal status.
This was through a workshop which is part of a series of workshops conducted for the community by ENSafrica, a law firm that provides pro bono services.
The workshop at Sankopano Community Centre covered small business structuring and exposed entrepreneurs to a range of options suitable for their businesses.
The firm’s Lydia Shadrach-Razino said most of the businesses put forward very intelligent ideas which, if supported, could contribute to the success of the country’s economy. “They have been tried and tested and only required support with skills and structuring,” she said.
She said while it was quick and cheap to start new businesses, getting the necessary registration and compliance certificates was difficult, time consuming and required patience, and this led to many of them operating illegally and at a risk.
Shadrach-Razino said most of the small businesses were spaza shops, taxis, street vending and hawking, hair salons, welding, vehicle and electric repair shops, sports facilities and recycling ventures.
She said the closed corporations (CC) which are no longer being registered can still be acquired as shelf companies. They require a maximum of 10 people, don’t require a board, but need a management structure who often are active in the business daily. Also, CCs are not required to have audited financial statements and annual general meetings, but this can stand against them acquiring loans and other financial support.
She said the sole proprietor option, which is owned and operated by an individual, can start and operate with a little capital, and does not separate the owner’s finances from that of the business, making it easier to make small loands.
She said the private company option could be a small or large business and is requires transparency and accountability regulations like the submission of annual tax returns.
“The company can be liquidated and its board members held accountable for its failures,” Shadrach-Razino said.
She encouraged participants to seek legal and financial advice from the ENS to avoid any consequences of operating without registration.
Details: ENSafrica 011 555 0980.
