Legal Aspects of Small Businesses

Ni Nokwazi Gumede

Assignment 2

Semester 1

61235989

Question 1

1.1In terms of Skills Development Levy employers are required to register and pay what is known as a
skills development levy (SDL) on a monthly basis, and the levy is collected by SARS then paid over to
the Ministry of Labour.

1.2The rate at which the SDL is calculated is 1% of the leviable amount and that amount must be
paid to SARS on a monthly basis.

Question 2

2.1It will have to be micro-enterprise because Moseke’s business is small with fewer than 10 or no
employees at all, employees that does not require a start-up capital

2.2Moseke will be required to apply for a business license for the coffee shop because on that coffee
shop he will also have refreshments, snacks like cake and fruit salad, in terms of Businesses Act of
1991 you are required to have a licence before trading can start if your store provides the above-
mentioned services.

2.3Moseke will not be required to register for Value Added Tax vendor due to the fact that his
turnover in the first year will be around R650 000, in order to qualify for registration of VAT the
income from providing services must exceed 1million in a 12month period and his doesn’t yet.

2.4It will have to be a turnover tax due to the fact the turnover tax only applies on micro-businesses
which is the business with an annual turnover not exceeding 1million and the turnover tax is similar
to VAT with the difference that it taxes intermediate and possibly capital goods. It is an indirect tax,
typically on an ad valorem basis, applicable to a production process or stage. For example, when
manufacturing activity is completed, a tax may be charged on some companies.