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Different types of Legal Entities in South Africa and their pros and cons

Different types of Legal Entities in South Africa and their pros and cons

Sole Proprietorship

A sole proprietorship is when there is a single founder who owns and runs the business. This is the simplest form of business entity because the business is not separate from the owner.

Advantages

  • Only you have the authority to make decisions about your business.
  • Hassle free set up.
  • Owner maintains 100% control and ownership of the business.
  • Owner is entitled to all the profits.

Disadvantages

  • All risks of the business are borne by the owner.
  • Your assets can be seized to pay for business debt, and you are personally liable for any obligations.
  • If you wish to include another owner in your business, you’ll have to dissolve the sole proprietorship and form a new business entity.

Partnership

A partnership is when 2 or more co-owners run a business together. Partners will also pool their money towards a common goal, share specialised skills and resources.

Advantages

  • More partners equal more knowledge and expertise.
  • More capital and cash to work with.
  • Share the financial burden and expenses of running a business.
  • Even distribution of labour.

Disadvantages

  • Everyone is liable for debts whether they were caused by other partners or not.
  • Shared control of the business with your partner/s.
  • Every time a partner leaves or joins, the partnership must be dissolved and new partnership drawn up.

Proprietary limited company (Pty) Ltd

A private company, Pty Ltd or proprietary limited company is treated as a separate legal entity.

Advantages

  • The business is a sperate entity, so runs regardless of shareholder changes.
  • Shareholders are typically not liable for company debts.
  • Anyone acting recklessly or fraudulently can be personally liable for all or any debts of the Pty Ltd.

Disadvantages

  • Required to comply with many legal requirements.
  • Slightly challenging and expensive to register.
  • Cannot offer shares to the public or list the business on a stock exchange.
  • Two shareholders must be at a meeting, except when the company only has one shareholder.
  • All your financial statements may need to undergo annual auditing.

Public Company

A public company is a business that issues securities through an initial public offering and trades its stock on at least one stock exchange. The daily trading of the public company’s stock determines the value of the whole business.

Publicly traded companies are defined as public because, unlike Pty Ltd businesses, shareholders can be anyone who purchases stock. Anyone can then become equity owners of the business.

Advantages

  • Since you can sell your shares to the public, this offers you more capital to work with.
  • More business opportunities.
  • The risk is spread out amongst the various shareholders.

Disadvantages

  • Setting up a public company is more challenging.
  • Making decisions can take significantly longer due to the number of shareholders.
  • Documents and financials are public.

Trust

A trust is a legal arrangement whereby control is given to trustees to operate the trust in such a manner that benefits those elected as beneficiaries of the trust.

There are two types of trusts, inter-vivos and testamentary. Inter-vivos is created during the life of a person while testamentary is upon their death (i.e. to administer their estate to heirs/legatees etc.)

Advantages

  • Growth taking place in the Trust assets.
  • Manageable legal requirements.

Disadvantages

  • You don’t have full control of your assets, as the other Trustees also have a say in the matter.
  • Tax rate of trusts is 45% and the taxation thereof can be confusing.

Drafting Annual Financial Statements and the Different Types of Accounting Frameworks in South Africa

There are three applicable accounting frameworks currently active in South Africa.

These are.

  • Entity Specific Basis of Accounting,
  • International Financial Reporting Standards for Small and Medium Sized Entities (IFRS for SMEs), and
  • International Financial Reporting Standards (IFRS).

Entity specific basis of accounting is basically accounting policies elected by the management of the entity. These are policies seen by management as the best way to accurately account for the items within the financials.

Entity specific basis of accounting can be used in entities that are not specifically instructed to prepare their financial statements in accordance with IFRS of IFRS for SMEs. Examples include trusts regulated by the Trust Property Control Act and sole proprietaries.

IFRS is a set of accounting rules and standards that determine how accounting events should be recorded and accounted for. The IFRS standards are extremely specific and detailed. Where possible, entities opt for IFRS for SMEs which is a simplified version of IFRS. As the name suggests though, IFRS for SMEs is specifically for Small and Medium-sized Entities. Larger entities will need to apply IFRS. The deciding factors rest in the type of company created and the public interest score. Regulation 27 of the Companies Act Regulations contains specific guidance on which applicable financial reporting framework may be applied.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Teleal Jody Moonsamy

Client Service Champion

Credentials: Higher Certificate in Accounting (UNISA)

Teleal Jody Moonsamy is an aspiring financial accountant and a creative soul with a passion for both numbers and the arts. Born with a natural curiosity for the intricacies of finance, Teleal pursued a Higher Certificate of Accounting Sciences through UNISA, specializing in Financial Accounting. This foundational education not only equipped her with essential skills in financial management but also ignited a deeper interest in the field.

Currently, Teleal is diligently working towards a Bachelor’s Degree of Accounting Sciences in Financial Accounting, demonstrating a commitment to personal and professional growth. Her dedication to excellence has not gone unnoticed; in recognition of her outstanding service and contributions, Teleal was honoured as the Service Champion of VHA Accounting Solutions for the year 2025. This accolade reflects her strong work ethic and the positive impact she has on her colleagues and clients alike.

Beyond her professional pursuits, Teleal is a multifaceted individual who finds joy in artistic expression. Drawing is one of their favourite hobbies, allowing her to channel her creativity and imagination onto the canvas. In addition to drawing, Teleal has a keen interest in music, constantly seeking to learn new instruments and explore different musical genres. This blend of analytical and creative talents allows Teleal to approach challenges from unique perspectives, making her a valuable asset in both her personal and professional life.

With a bright future ahead, Teleal Jody Moonsamy continues to strive for excellence in the field of financial accounting while nurturing her artistic passions, embodying a well-rounded and inspiring individual dedicated to making a difference in the world.

teleal@vhaaccounting.com 065 243 0124

Bongumusa Zondi

Director

Credentials: National Diploma in Cost and Management; Accounting; Advanced diploma in Accounting Sciences; Professional Accountant (S.A.)

Bongumusa Zondi, a senior accountant, blends business advisory with expertise in financial reporting and taxation. With just under a decade of experience in accounting and taxation, his career journey began by obtaining a National Diploma in Cost and Management Accounting and an Advanced Diploma in Accounting Sciences at the Durban University of Technology and University of South Africa, respectively. This was followed by a Junior Bookkeeper position at City Printing Works (Pty) Ltd. He began his SAIPA articles at Dobeyn Accounting Soultions and currently leads a dynamic accounting team and manages a sizeable portfolio of clients at VHA Accounting Solutions where he also completed his SAIPA Articles. Apart from assisting clients update their books and stay compliant with relevant authorities, he is fully interested in adding value through business advisory. Helping clients solve their financial problems and provide guidance on potential growth opportunities is his biggest passion. He has been driven by philosophies of teamwork and collaboration.

Notable achievements include qualifying as a Professional Accountant (S.A.) through SAIPA. Beyond the numbers, he enjoys watching sports, tutoring grade 12 learners, playing the piano and listening to classical music composed by Wolfgang Amadeus Mozart and George Frideric Handel, adding a well-rounded dimension to his professional life.

bongumusa@vhaaccounting.com 082 359 4536 087 109 0712

Karishma Bhola

Director

The VHA Accounting Solutions team is excited to announce a new insurance service offering headed by Karishma Bhola. Karishma is an accredited financial advisor and has 18 years of experience in the finance industry and expertise in marketing/foreign exchange and business management. As a seasoned financial guru, she prides herself on delivering excellent client service every time.

087 109 0712

Vidyanth Bhola

Director / CEO

Passionate about exceptional client service, Vidyanth Bhola serves a wide client base as an advisor and accountant.Vidyanth focuses on tax planning and estate and succession planning, which he approaches with enthusiasm for human relationships and a penchant for teamwork, to achieve outstanding results. In addition to being VHA Accounting Solutions Inc founder and as director of the Bhola group of companies, Vidyanth is involved on the board and advisory level with several non-profit organisations and other initiatives. Vidyanth obtained his BCom degree and H Tax Diploma from the University of South Africa after which he worked at Colenbrander Inc, as a Accounting Portfolio Manager. In 2018, Vidyanth found the accounting firm VHA Accounting Solutions Inc. Vidyanth is a family man and avid rugby fan. He enjoys learning about Aviation and flew a Boeing in the flight simulator in Dubai. Vidyanth also works on various charity organisations and is involved in various food drives. Vidyanth is a member of the South African Institute of Tax Professional (SAITA) and the Southern African Institute for Business Accountants (SAIBA).

087 109 0712

Rashika Maharaj

Financial Adviser

Qualifications: BCOM/RE5
Credentials: prestige gold adviser

I believe in a holistic approach to financial wellness. Specialising in life insurance, RA’s, investments and medical aid, addressing multiple aspects of financial security and planning. This strategy ensures that you cover both current needs and future goals, while also managing risks effectively. I believe in living a life with vitality and longevity.

087 109 0712

Staff

Bukhosi Hlubi

Accounting Portfolio Manager

Qualification: National Diploma in Accounting

VHA Role: Maintaining financial records, reconciling
bank statements, and attending clients’ queries.

Bukhosi Hlubi is an accounting portfolio Manager at VHA Accounting Solution Inc. with 1 year and 11 Months of helping clients with everyday queries and preparing their monthly Management Accounts. Specializing in Bookkeeping, Bukhosi Hlubi uses that experience to help clients with daily problems. I love playing cricket, watching rugby, and love watching series.

087 109 0712

Thamasanqa Mchunu

Personal Assistant

Qualifications: Grade 11

Passion: Listening to Music and always willing to learn new things

Hobbies: Running and music

087 109 0712

staff

Kwanda Dlamini

Junior accountant

Qualification : Bachelor of commerce in accounting

Ambitious about CA(SA) , Accounting tutor for high school and college students, bookkeeper @ Vha accounting solutions, a real fan of football and rugby.

087 109 0712

staff

Diyaksha Byroo

Senior Accountant/Annual Financial Statement Preparer

Qualification: BCom Accounting Degree - UKZN 2019

I have assumed the current role of AFS preparer at VHA, aspiring a post grad diploma in the near future, I have attained 3 years of SAICA accredited experience in accounting at my previous employment. My hobbies are watching movies and listening to music (Die-hard Bollywood fan), baking cakes and treats and a passionate fashionista.

087 109 0712

staff

Jackie McKinley

Receptionist and Tax Administrator

Qualifications – Matric and a Junior bookkeeper certificate

Studies: Matriculated in 2004 from Port Shepstone High School, Did a small junior bookkeeper course with Varsity College in 2013.

I have over 8 years of experience with Tax and being in an accounting firm environment. I love helping others and I love it when deadlines are reached. I love being at home with my family, playing and watching my son grow, I love being by the Dam and watching my husband fish.

reception@vhaaccounting.com 087 109 0712

staff

Nokukhanya Dlamini

Tax Manager

Qualifications: National Diploma in Accounting

I work as tax manager, I deal with SARS related matters, Tax and other statutory work at VHA and I also assist with internal work for VHA, I studied and graduated in Durban university of Technology and completed a national diploma in accounting, I have been working in various departments in VHA Accounting solutions Incorporated, I started in admin, then I also worked as Junior accountant, then senior accountant to Tax manager I have more than 4 years working experience in VHA Accounting Solutions Inc, I am very passionate about God and my family, both God and my family has been my pillar of strength. I Like to read, listen to music and spending time with my family.

nokukhanya@vhaaccounting.com 087 109 0712

Chloe’ Esther Aiyer Gengan

Office Manager

Qualifications – Certificate with Pietermaritzburg Chamber of Business such as – MS Excel 2016 Core (Level 1), Compensation for Occupational Injuries & Diseases (COID) Act & Injury on Duty, Practical Management of Absenteeism in the workplace, Telephone reception. Office Administration Certificate with Damelin and Advanced 120 hour Teach TEFL certificate

I am the office manager at VHA Accounting Solutions. An office manager plays a key role in overseeing the administrative and operational functions within an office or business. Some of the common responsibilities and duties of mine include:

1. Office Administration:
- Managing office operations and procedures
- Supervising administrative staff and delegating tasks
- Overseeing office maintenance, supplies, and equipment
- Handling office budget and expenses

2. Communication and Coordination:
- Acting as a liaison between management and employees
- Handling incoming and outgoing communications (phone calls, emails, etc.)
- Scheduling meetings, appointments, and events
- Coordinating travel arrangements for employees

3. Human Resources Support:
- Assisting with recruitment and onboarding processes
- Maintaining employee records and files
- Managing employee benefits and payroll administration
- Handling employee inquiries and concerns

4. Facilities Management:
- Ensuring a safe and productive work environment
- Coordinating office layout and workspace organization
- Overseeing office security measures
- Managing vendor relationships for office services (cleaning, maintenance, etc.)

5. Administrative Support:
- Supporting executives and managers with administrative tasks
- Drafting and preparing reports, presentations, and documents
- Organizing and maintaining office filing systems
- Assisting with special projects and initiatives

6. Event Planning and Coordination:
- Organizing office events, meetings, and conferences
- Coordinating catering, logistics, and accommodations for events
- Managing invitations, RSVPs, and event follow-up

7. Technology and IT Support:
- Overseeing office technology needs and equipment maintenance
- Providing basic IT support to employees
- Collaborating with external IT vendors for troubleshooting and upgrades

Overall, an office manager plays a crucial role in ensuring the smooth and efficient operation of an office environment. They are responsible for managing various administrative tasks, supporting human resources functions, coordinating communication and logistics, and providing overall support to ensure the office runs effectively and efficiently.

chloe@vhaaccounting.com 066 307 2834 087 109 0712

Kashveer Mathura

Accounting Portfolio Manager / Senior Accountant

Qualifications: Matric; Bachlor of Accounting Science in Financial Accounting (Final year)

Credentials: Xero Advisor certified; MS Excel 2016 Core - level 1 (IT Certification Academy); Effective delegation, giving instructions and how to be assertive (PMCB)

Bio: Review of Management accounts and Annual Financial Statements; Reviewing all other work from clerks; Preparing Annual Financial Statements; Preparing of Management Accounts and VAT for some clients.; Liaising with clients (Client meetings); Training clients to use Xero; I am in my final year of studies (as above); I have a passion for accounting and mathematics, due to my passion for Mathematics I also give students tuitions when I can.

Hobbies: Watching medical, police and fire dramas. As well as all car programs such as Top Gear, Megafactories: Supercars and The Grand Tour; I also am a huge fan of Liverpool FC and I try not to miss any of the matches.; I used to also attend Karate and play sports such as soccer, cricket, and Volleyball.; I currently enjoy a friendly game of badminton when I have the time to.; And I also enjoy playing FIFA, Need for speed and F1 whenever I have some free time.

kashveer@vhaaccounting.com 078 882 9783 087 109 0712

Adrian Surjoo

Quality Control Manager, SAICA

087 109 0712

Credentials:

  • National Diploma in Cost and Management
  • Accounting
  • Advanced diploma in Accounting Sciences
  • Professional Accountant (S.A.)

Bongumusa Zondi

Director

Bongumusa Zondi, a senior accountant, blends business advisory with expertise in financial reporting and taxation. With just under a decade of experience in accounting and taxation, his career journey began by obtaining a National Diploma in Cost and Management Accounting and an Advanced Diploma in Accounting Sciences at the Durban University of Technology and University of South Africa, respectively. This was followed by a Junior Bookkeeper position at City Printing Works (Pty) Ltd. He began his SAIPA articles at Dobeyn Accounting Soultions and currently leads a dynamic accounting team and manages a sizeable portfolio of clients at VHA Accounting Solutions where he also completed his SAIPA Articles. Apart from assisting clients update their books and stay compliant with relevant authorities, he is fully interested in adding value through business advisory. Helping clients solve their financial problems and provide guidance on potential growth opportunities is his biggest passion. He has been driven by philosophies of teamwork and collaboration.

Notable achievements include qualifying as a Professional Accountant (S.A.) through SAIPA. Beyond the numbers, he enjoys watching sports, tutoring grade 12 learners, playing the piano and listening to classical music composed by Wolfgang Amadeus Mozart and George Frideric Handel, adding a well-rounded dimension to his professional life.

bongumusa@vhaaccounting.com 082 359 4536

Karishma Bhola

Director

The VHA Accounting Solutions team is excited to announce a new insurance service offering headed by Karishma Bhola. Karishma is an accredited financial advisor and has 18 years of experience in the finance industry and expertise in marketing/foreign exchange and business management. As a seasoned financial guru, she prides herself on delivering excellent client service every time.

Vidyanth Bhola

Director / CEO

Passionate about exceptional client service, Vidyanth Bhola serves a wide client base as an advisor and accountant.Vidyanth focuses on tax planning and estate and succession planning, which he approaches with enthusiasm for human relationships and a penchant for teamwork, to achieve outstanding results. In addition to being VHA Accounting Solutions Inc founder and as director of the Bhola group of companies, Vidyanth is involved on the board and advisory level with several non-profit organisations and other initiatives. Vidyanth obtained his BCom degree and H Tax Diploma from the University of South Africa after which he worked at Colenbrander Inc, as a Accounting Portfolio Manager. In 2018, Vidyanth found the accounting firm VHA Accounting Solutions Inc. Vidyanth is a family man and avid rugby fan. He enjoys learning about Aviation and flew a Boeing in the flight simulator in Dubai. Vidyanth also works on various charity organisations and is involved in various food drives. Vidyanth is a member of the South African Institute of Tax Professional (SAITA) and the Southern African Institute for Business Accountants (SAIBA).