Start with the structure
The right business structure should support ownership, decision-making, funding and future growth. Consider the legal and tax implications together, rather than treating incorporation as a standalone step.
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The Briefing: South African corporate and commercial law insights
Practical guidance for business owners, founders and boards on corporate and commercial law, compliance and tax - and the legal developments shaping South African business - written in plain English.
Before your next commercial move
Agree how decisions are made
Shareholders and partners should agree responsibilities, approval processes, funding expectations and exit arrangements early. Clear agreements help protect both the business and the relationships behind it.
Look beyond the headline price
A business acquisition calls for careful due diligence. Understand the contracts, liabilities, governance and tax considerations that sit behind the numbers before committing.
Protect the commercial relationship
A good contract addresses performance, payment, confidentiality, termination and dispute resolution. It should reflect how the relationship works in practice, not just what happens when it ends.
Structuring your business: corporate and commercial essentials
Choose the right vehicle from the start. As a sole proprietor, you and the business are legally the same person - your personal assets are exposed to its debts. A private company - a (Pty) Ltd - is a separate legal entity, giving you limited liability (regulated professions, such as law practices, have special rules) and making it easier to bring in investors or sell later. Trusts and partnerships suit specific situations. Getting this right upfront is far cheaper than restructuring later.
Make sure your MOI and shareholders' agreement match. The Memorandum of Incorporation (MOI) is the company's constitution; the shareholders' agreement governs how owners deal with each other - exits, deadlock, dividends, and what happens if someone dies or leaves. Under the Companies Act, a shareholders' agreement provision that conflicts with the MOI is void to the extent of the conflict - and a 2025 High Court ruling confirmed that a later MOI amendment cannot retrospectively revive it. Draft the two together.
Keep your CIPC filings current. File your annual return every year and keep your beneficial ownership information up to date - changes generally have to be filed within 10 business days, and beneficial ownership must be confirmed with every annual return, even if nothing has changed. CIPC's system won't complete an annual return while beneficial ownership records are outdated, and companies with outstanding returns risk deregistration.
Keep company money and personal money separate. Directors owe the company duties of good faith and care. Mixing funds, trading recklessly or ignoring solvency can expose you to personal liability. Separate bank accounts, proper minutes and documented loans protect you.
Put key relationships in writing. Supplier and customer terms, employment contracts, NDAs and signed written IP assignments - especially for code, designs and content created by contractors, who otherwise generally keep the copyright - prevent the disputes that are most expensive to fix later.
Sources: Cliffe Dekker Hofmeyr, Legal Academy, SA Accounting Academy
What's making news in South African business law
Shareholders now get a binding vote on executive pay
Since 22 May 2026, Companies Act amendments require public and state-owned companies to obtain shareholder approval of their remuneration policies, replacing purely advisory votes. If shareholders reject the annual remuneration report, the non-executive remuneration committee members must stand for re-election to that committee at the next AGM - and a second consecutive rejection bars them from the committee for two years. Individual director pay must now be disclosed by name, along with the pay gap between the top and bottom 5% of earners. Boards should plan their investor engagement on pay well ahead of the AGM.
Source: BusinessTech - New laws coming after executive salaries in South AfricaSmaller deals may soon need to be notified to the Competition Commission
The Competition Commission has published draft Small Merger Guidelines updating when it wants to be told about deals that fall below the mandatory thresholds. Under the draft, it would expect notification where the acquirer has turnover or assets of at least R9.5 billion and the target is bought for - or effectively valued at - more than R280 million, even in a partial acquisition. The aim is to catch early-stage acquisitions, particularly in tech and digital markets, where a target's value lies in future growth rather than current turnover. The Commission can require a small merger to be notified for up to six months after it is implemented, and may then approve it, impose conditions or prohibit it - so buyers should test this early in any transaction.
Source: Legal 500 (Cliffe Dekker Hofmeyr) - Competition Commission proposes revised notification thresholds for small mergersThe Information Regulator is moving from warnings to fines
At its 31 August briefing, the Information Regulator reported more than 8,000 data breach notifications since POPIA's enforcement provisions took effect, and confirmed it is now proactively writing to organisations to demand proof of compliance rather than waiting for complaints. It has proposed amendments that would allow immediate fines once non-compliance is found, replacing the current grace-period approach. It also maintains that telephone marketing counts as electronic communication under POPIA, with two direct-marketing matters already referred to its Enforcement Committee. Businesses should review their breach-response plans, consent processes and marketing practices now.
Source: Polity (Werksmans) - The regulator is watching: New enforcement signals for POPIA and PAIA complianceMore time for importers and exporters to update SARS customs profiles
SARS has extended the deadline for customs traders to complete their profile updates on its electronic registration, licensing and accreditation (RLA) system from six to 18 months, backdated to 1 September 2025. The change affects importers, exporters, clearing agents, bonded carriers and licensed warehouse operators - particularly those originally registered on paper forms. Since April 2025, SARS has been suspending the customs codes of traders who had not completed onboarding, effectively halting their imports and exports. Businesses that trade across borders should use the extra time to finish the process rather than risk disruption.
Source: BusinessTech - SARS announces important eFiling changeThis information is for general guidance only and does not constitute legal or tax advice. Please contact Clark & Johnston Attorneys for advice on your specific business or transaction.