KEY LEGAL ISSUES FOR START UPS AND SMES AND HOW TO AVOID THEM

31 AUGUST 2017

I T BUSINESS INCUBATOR - START UP GRIND

CHOICE OF BUSINESS

SOLE TRADER

PARTNERSHIP

COMPANY
SOLE TRADER

One Man Business

Tax Clearance Needed

PIN

Trading Premises

Trading Licence

Bank Account

PITFALLS

o Personal liability for business transactions

o Unlikely to earn trust from investors

PARTNERSHIP
Two or more people
Consortium/Joint Venture
Tax Clearance needed
PIN
Trading premises
Trading licence
Bank Account

PITFALLS

- Disputes
- Power sharing/decision making
- Profit sharing/expenses sharing

RECOMMENDATION
- Partnership Agreement to regulate affairs
of the Partnership
COMPANY (PTY) LTD

Incorporated in terms of the Companys Act 8 of 2009

Separate Legal Persona from directors
Owned by shareholders (not necessarily directors)
Issues shares viz-a-viz capital investment
Can have one shareholder in terms of New Act.

REQUIREMENTS
o Tax clearance
o PIN
o Directors
o Shareholders
o Objects
o Memorandum and Articles
o Company licence yearly
PITFALLS

Cut and paste Memorandum and Articles

Suretyship Agreements Required

Company Licence Penalties

Liability of Directors for acts of the Company

COMPLIANCE ISSUES

There are various statutes imposing obligations in business

LABOUR LEGISLATION
Workmens Compensation Act 1983
S N P F (Contributions)
Industrial Relations Act 2000 (Disciplinary of Staff)
Employment Act 1980 (Wages Payment)

TAX LAWS

Swaziland Revenue Authority

Penalties
Attachment of Assets
BRANDING

Trade Marks

Copy Rights

Patents
COMMON PROBLEMS

Unregistered Businesses

No Trading Licence
No Formal Business Premises
No Bank Account
No Credit/Banking History = No Funding

Verbal Agreements

No certainty on what they entail

Easily disputed
Hard to prove
No guarantee on verbal leases
Expose the parties to breach
 Panic Registration for Tenders

No references
No records/necessary documents for tender
Often unable to meet tender deadline
Exaggeration of competency level leading to failed delivery and penalties

CONCLUSION

Conduct your business professionally from the onset and it will be easier to
maintain professionalism