It is very common these days to run a business from home, perhaps even more so since the Covid lockdown. If you do run a business from home and / or employ people, what do you need to know?
You may or may not decide to register your business formally. If you do want to make it more formal, then you will register a company at Companies and Intellectual Property Commission CIPC.
The next thing to consider is whether you are allowed by the municipality to conduct your business from home. Almost always your home will be zoned for residential purposes only. Cape Town for example notes on their website,
“A property is assigned a zoning category (see the DMS). This category determines what the property can be used for. For example: a property that is zoned as ‘residential’, cannot be used for ‘business’ purposes without permission from our Development Management Department. To change the zoning of your property, you need to submit a land use application”
At Ryts we would guess that a major portion of people working from home have not applied for rezoning. This may be different if you are on a main road. Quite often these main road residential properties are purposely converted into office space. If you are in the middle of suburbia and the tools of your trade are computers and printers you will probably get away with it. Running a car mechanics shop, maybe not.
The next issue after property is people. If you employ, then you have to comply with the Basic Conditions of Employment Act 75 of 1997. This covers things like general conditions of employment, leave, dismissal etc. Chapter 3 of this act notes that it does not apply to employees working less than 24 hours per month. Otherwise it applies. Chapter 3 covers leave [S5.] Notes that the “Act or anything done under it takes precedence over any agreement. Whether entered into before or after the commencement of this Act”.
An act that is often overlooked when employing people is the Unemployment Insurance Act 63 of 2001. This act created an Unemployment Insurance Fund (UIF) to which, currently, the employer and employee both contribute the equivalent of 1% of the employee’s remuneration. And do not forget that the tax authorities want their slice of the pie as well.
