Re: Company for DC16 - some research
Hi
On Thursday, July 2, 2015, Allison Randal <allison@lohutok.net> wrote:
On 07/02/2015 09:38 AM, Stefano Rivera wrote:
> Hi Bernelle (2015.07.02_15:08:35_+0200)
>> Registering as a company is best (not as a trust, for example).
>
> I was assuming that, too. Probably an NPO.
Yeah, if we register as a for-profit company, SARS may look at us funny
at the end of the year when we have no profit. Registering as a
non-profit is a more accurate declaration of our intentions. We'll still
pay tax on any profit we have, but SARS won't be surprised when we have
near-zero profit.
It seems the process is to register as for-profit, and add non-profit
status afterwards.
https://www.westerncape.gov.za/general-publication/all-you-need-know-about-registration-non-profit-organisations?toc_page=2
Yes, it sounded like not for profit or for profit is not a big deal, or they don't care. It sounds like a company is a company is a company. Your annual returns say if you've made profit or not.
> Right, so nobody will actually be donating to us. They'll be sponsoring.
> There'll be no tax benefit for them, because we aren't a PBO, and we'll
> have taxable income. Is that correct?
>
> However, they should be able to claim the sponsorship as a business
> expense, which can offset tax for them. I think?
I don't know about ZA, but that's how conference sponsors in the rest of
the world operate.
Yeah, this was more explained for my benefit :)
>> *IF we can make sure that the local funds remain at an annual turnover of
>> less than R1 million, then we qualify for registering as a Micro Business,
>> which means we only have to pay around 3% tax [1]. *So, only manage the
>> local sponsors in the local company, and use international sponsors to pay
>> international costs (e.g. flights), as far as possible.
>
> I think this is doable. IIRC we're looking at about half a million for
> the venue, and the rest of the costs will be nowhere close to that.
> But we need our budget to advance a bit, to tell that.
We won't run all that money through the ZA entity. Travel sponsorships
will be the vast majority of our cost, and that will be paid directly
from SPI to attendees. Other costs can also be paid directly by SPI. We
really only need the ZA entity for sponsorship from ZA-based companies,
and to have a local legal entity to sign contracts.
>> For what it's worth, PBO's qualify for tax-deductible donations for the
>> sponsors [3], so that would be nice. But he is adamant we don't apply, and
>
> Yeah, I think Debian could fit in the Research category of Section 30.
> And we're a conference for Debian, held at a University.
> But there are no Section 18A categories that our sponsorship would fit
> within. It wouldn't grant a tax benefit to the sponsor.
>
> I think I got this advice before, too. That PBO was out of our reach,
> especially in our timeframe.
Right, I looked into it at the time, and we can be a non-profit
organization without applying for tax-exempt PBO status.
https://www.westerncape.gov.za/general-publication/all-you-need-know-about-registration-non-profit-organisations
Being a tax-exempt PBO organization doesn't gain us much, since we're
planning to spend all the money we get on running the conference, and
won't have much of anything left to tax.
The tax exempt is for people funding us, not us being taxed.
Allison
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