4 min read · Updated 2026
Sole proprietor vs (Pty) Ltd in South Africa
Compare trading as a sole proprietor with registering a (Pty) Ltd via CIPC: liability, tax rates, costs, annual admin and which suits freelancers.
Sole proprietor
- No CIPC registration — trade under your own or a trading name
- Unlimited personal liability for business debts
- Taxed at personal sliding rates (18%–45%)
- Best for testing an offer, side hustles and solo consultants
Private company ((Pty) Ltd)
- A separate legal entity under the Companies Act 71 of 2008
- Limited liability — personal assets generally protected
- 27% corporate tax, or lower Small Business Corporation rates if you qualify
- Annual returns with CIPC; better for agencies and corporate tenders
Registering on CIPC BizPortal
- Reserve up to four names (about R50)
- Register with a standard MOI (R125 without a reserved name, R175 including one)
- Receive your registration number, COR14.3 and tax number automatically
- File the Beneficial Ownership register within 30 days
General information only, based on South African legislation as of 2026. Confirm your situation with a registered tax practitioner or attorney.