Small Business Corporations

02/19/2025

A small business corporation is a close corporation, private company (other than a personal service provider) or personal liability company of which:

  • the entire shareholding or membership is held by natural persons for the entire year of assessment
  • the gross income does not exceed R20 million during the year of assessment
  • none of the members/shareholders, at any time during the year of assessment, held shares in any other company other than listed companies, collective investment schemes, body corporates, shareblock companies, certain associations of persons, friendly societies, less than 5% interest in cooperatives, venture capital company, shares in private companies that are inactive and have assets of less than R5 000 or have taken steps to liquidate, wind-up or deregister
  • not more than 20% of the sum of gross income and capital gains consists of investment income and income from the provision of personal services
  • if engaged in the provision of personal services, maintains at least three fulltime employees who are not connected to shareholders

Disclaimer: The information contained in this article is a summary of current legislation and budget proposals proposed by the Minister of Finance on the 19th February 2025. We suggest that you do not act solely on material contained in the booklet as the nature of the information contained herein is general and may in certain circumstances be subject to misinterpretation. In addition, the budget proposals may not include all legislative adjustments which could be made in the near future. Consequently we recommend that our advice be sought when encountering these potentially problematic areas. While every care has been taken in the compilation of the booklet, no responsibility of any nature whatsoever shall be accepted for any inaccuracies, errors or omissions.