Does your business need a trade licence?

Have you decided to take the leap into entrepreneurship and start your own business? It is a very exciting time but first check if you need a business licence or you might find yourself on the wrong side of the law instead of making a profit.

By: Aldes Business Brokers

Posted on Aug 29 2016, in Resources for buyers

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Here’s how to ensure you stay on the right side of the law

Have you decided to take the leap into entrepreneurship and start your own business? It is a very exciting time but first check if you need a business licence or you might find yourself on the wrong side of the law instead of making a profit.

Here are five common questions that our Aldes business brokers often have to answer:

What is a business licence?

In short, this is a document that allows you to do business in a specific area. In order for you to obtain such a document you need to comply with all the building, health and safety, and public regulations.

If I buy an existing business, do I still have to apply for a licence?

Yes.  These documents are non-transferable, which means that even when you take over a business you need to apply for your own licence.

Which type of business needs a licence?

Although not all businesses need one, there are certain establishments that do need a licence in order to operate. These are:

  • Health clinics, spas, saunas, and public baths
  • Massage parlours, laser and ultraviolet treatment centres
  • Escort agencies and adult shops
  • Cinemas and arcades
  • Nightclubs and pool rooms
  • Any business with three or more vending or slot machines
  • Hawkers
  • Places that sell food and/or liquor, provide take-aways or transport meals

How does the application process work?

You need to complete an application form and then submit it together with the applicable documentation to the relevant licensing department. Once your application is received, the department will send a report to the necessary municipal departments to ensure that the application meets the required legislation.

Where do I start?

Use our quick reference guide below, when applying for a business licence in either Johannesburg, Durban or Cape Town.

JOHANNESBURG

  • You need to complete an RPI application form in order to obtain a trade licence. You can visit your city council or go to www.joburg.org.za.
  • When you submit your application, you need to attach copies of your company memorandum and articles or a founding statement if it is a close corporation, the identity documents or passports and visa certificates of all members and shareholders as well as the manager in charge of the business.
  • If you plan on opening an establishment that sells food, you need to attach a copy of your proposed menu. If your establishment will be selling alcohol, you need to attach your liquor licence.
  • Remember to also attach copies of your SARS tax certificate, approved building layout plan, and zoning certificate.
  • Once you have all the necessary documentation, submit your application and pay the required licence fee.
  • After your completed form and documents have been submitted, the business licence division will draft a statement to be sent to the following divisions:
    • Environmental Health
  1. Noise and Air Pollution Management
  2. Building Inspection
  3. City Planning
  4. Community Safety
  1. These divisions will then inspect your premises and draft their own reports. If it is found that you need to rectify certain elements, you’ll receive a notice from the Trade Licence Department. You will receive time to comply with the requirements and then have to reschedule a site visit.
  2. You will only receive your business licence once all five departments sign off.

CAPE TOWN

  • If you need to apply for a business licence in Cape Town, you can do so at the Environmental Health Office.
  • You need to attach copies of each member’s or shareholder’s identity document. If you are a foreign national, you need to attach a copy of your passport.
  • If you’re opening a healthcare or entertainment facility you need to attach a certified South African Police clearance certificate. You will be able to request it from your local police station.
  • The last documents you need to attach to your application are the necessary Land-use Planning and the Certificate of Occupancy clearances. These are issued by the Building Development Directorate.
  • Once you’ve supplied your application and the necessary documents to the Business Licensing official, you need to pay the required fee to your City of Cape Town cash office.
  • You then have to submit your receipt to the licensing official, who will contact you to schedule the site inspection for final approval of your business licence.

DURBAN

  • You will need to reference the property description (yard number) as well as the original landlord’s consent on your application form.
  • Attach copies of all the member’s and stakeholder’s identity documents to your application.
  • You also need to submit the close corporation, certificate of incorporation, and director’s or member’s details.
  • If you are lodging on behalf of a close corporation, you need to submit a proxy letter.
  • If you’re opening a healthcare or entertainment facility you need to attach a certified South African Police clearance certificate to your application. You will be able to get it from your local police station.
  • For accommodation facilities, you need to obtain and submit a copy of the establishment’s electrical certificate.
  • Once you have all your documents sourced and your application form completed, you can submit it and make the payment to the Durban Licensing Offices.

The Aldes team specialises in buying and selling an array of businesses including businesses that require a trade licence. Our team of experts will advise and assist with the transfer process to ensure your business can be operational in no time.  Go to www.aldes.co.za for more information. 

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