There are various types for letters of good standing. You can have tender, foreign investment, tax clearance letter of good standing, COIDA letter of good standing and emigration. When starting a new company or even trading, various departments may ask you for the above documents. You will need to apply for them but need to know what the difference is between them. Many entities will simply ask you for a letter of good standing but don’t inform you of which one you need; this does cause a lot of confusion.
You will need to make sure that you are applying for the correct type of letter of good standing for your specific needs. SwiftReg does assist with the letter of good standing for the Tax clearance and COIDA applications. SwiftReg can register the company for COIDA, once the financials are filed you will receive the letter of good standing for this, you do not receive it automatically with the registration.
The letter of good standing for the tax clearance is only received when all of your tax returns are up to date. This letter indicates that there are no tax returns outstanding with SARS. Some companies want to know that all your financials are in order with SARS before doing business with you. If you are applying for a tender you will also need to supply the letter of good standing. If you are selling your business to someone else, they will also need to know that all tax returns are up to date with SARS.
They would not be able to purchase the company should there be any returns outstanding. You also cannot receive a tax clearance if any of the directors’ personal tax returns are outstanding. The same goes for if you are opening a company and one of the directors are blacklisted, they will not be allowed to become a director on the new company. CIPC and SARS work together in these cases.
Once you have registered for Compensation for Occupational Injuries and Diseases, you will first need to submit all the financials and returns to the department of labor. Once this is in order, you will receive the letter of good standing. The letter means that the employer or business owner or director or member or shareholder is registered for compensation for occupational injuries and diseases. If there are one or more workers employed by a company, it is compulsory to register for COID. The letter of good standing indicates that all staff members are protected; a lot of other entities may request this, especially if you are applying for a tender.
A letter of good standing with regard to a tax clearance certificate is a document you receive when all of your tax returns are filed for the company. All types of companies need to file tax returns, even if there is no money coming in or going out. Companies can request this to ensure that your tax returns are up to date before doing business with you. You could also lose a tender should there be any tax returns outstanding.
COIDA is Compensation for Occupational Injuries and Diseases. This is registered by the department of labour. Compensation for Occupational Injuries and Diseases is used to protect employees when they are injured on duty. This could also include if an employee is injured on the premises. There are cases in specific industries that the employee will only be protected on site, as soon as they walk off the premises or site they are not protected.
Certain jobs fall into certain categories. If you are working on the road and moving around, the staff will need to be protected everywhere, not just on the premises. If you are in the construction industry, you only really need to protect your workers on site or in the office. They will not be covered if they are injured and it is not directly relating to the business or company.
COIDA is the short version of Compensation for Occupational Injuries and Diseases. Some people call it COID as well, the correct abbreviation is COIDA. It used to be referred to as simply workers compensation. If a staff member or employee is injured on duty, they will be compensated for by the department of labour. It is compulsory to be registered for Compensation for Occupational Injuries and Diseases if you employ any staff.
A letter of good standing with regard to tax with SARS is valid for a year on date of issue. This is usually based on your financial year as all income tax returns need to be filed annually on your financial year. For example, this would be from February twenty eighteen to February twenty nineteen.
If there are any annual returns that are outstanding the validity of the letter of good standing will fall. If a search is done online, you will see that it is not valid anymore. This will be immediately, so the certificate you have will not be valid and might as well be put in the bin. It is imperative to file annual income tax returns as soon as they are due with SARS, South African Revenue Service.
The letter of good standing needs to be renewed annually with the Department of Labour. There can be cases where a bank may ask for the letter of good standing and want it to be no older than 30 days, in this case you can go back online to the department of labour’s website and apply for a newly issued one. Do not forget to re apply annually for the letter anyway.
If you are purchasing the letter of good standing for the tax clearance certificate, this will be done with the South African Revenue Service. If you are purchasing the letter of good standing for Compensation for Occupational Injuries and Diseases Act then you will apply with the Department of Labor. This process can be confusion or strenuous especially for newly registered companies where you are not familiar with the processes or required documents
SwiftReg does assist with the registration for COIDA, once the financials are submitted by yourself you will receive the letter of good standing for the Occupational Injuries and Diseases Act. SwiftReg does also assist with the tax clearance application for the letter of good standing with SARS. All the income tax returns need to be up to date before we can apply for the tax clearance. If there are any income tax returns outstanding, the tax clearance letter of good standing will be rejected.
You can apply for a letter of good standing with SARS by using a third party. If you are not comfortable on SARS E-filing an accountant, bookkeeper or third party can apply on your behalf. There is a SARS power of attorney that you can sign which will allow one of these parties to apply. SwiftReg can assist you with this, as long as the tax returns are all up to date first. You can also visit your closest SARS branch and apply manually with them.
You will get a letter of good standing for the Occupational Injuries and Diseases Act with the department of labour. You can also have a third party apply for the registration on your behalf. SwiftReg can assist with this; if you are confident with the website you can apply on your own or alternatively visit the closest branch in your area.
You can apply for the letter of good standing with SARS if you do not have employees as this is only to note that the tax returns are up to date. You cannot apply for the letter of good standing for the Occupational Injuries and Diseases Act with the department of labor if you do not have any staff and do not pay salaries. This is why most newly registered companies need to first get started and trading before employing staff.
You do not need to have any money in your business account before you can apply for the letter of good standing with SARS. SARS requires all companies to file tax returns even if there is no money coming or going in the business account. As soon as the nil tax return is filed, you will receive the letter of good standing. This simply means that all tax returns are up to date.
You could need a letter of good standing from SARS for various reasons. These could include but are not limited to applying for a tender, doing business with other companies or purchasing property etc. You could be requested at any time to produce the document so we suggest always keeping your tax returns up to date and having the letter of good standing ready. If there are any income tax returns outstanding, your business will be negatively affected, they could even close down the business bank account.
You need a letter of good standing from the department of labour if you have employed any staff. This is a legal requirement. You may need to produce this for the banks and or tenders. There are various different entities that may request this document from you. If you have staff or employees you need to submit annually. These are called Annual Returns of Earnings (ROE) and need to be done every year by the 31 January.
A letter of good standing for COIDA is used for any case of injury or disablement in the time of an employees’ employment. If there are any injuries, sickness/illness or death the person involved will be compensated. COID stands for Occupational Injuries and Diseases Act. This protects any workers, staff or employees during their employment with the company.
You must first be registered for COIDA in order to receive the letter of good standing from the department of labor. You need staff or employees who are on the payroll in order to proceed with the COIDA registration. Once the company is registered for COIDA, annual returns will need to be done. The annual returns are called the annual returns of earnings (ROE). As soon as these are up to date, then you will only receive the letter of good standing. You do not automatically get this with the registration, it is a separate application.
There is a letter of good standing for tax clearance with SARS and a letter of good standing for COIDA with the department of home affairs. The tax clearance certificate which mentions the word tender is used for tenders with regard to BBB-EE. You could need the normal letter of good standing tax clearance certificate as well as the one that says tender on for the specific tender you are applying for.
Once the tax returns are filed with SARS, you can apply for the tax clearance certificate. The company would need to have been added to the e-filing profile, once this is verified then the tax clearance is applied for. It’s the verification process that usually takes the longest, but once it is verified the actual application takes quite quickly. The estimated time for the verification can take about 3 days at the time of publishing this article. Once verified, the application for the tax clearance is immediate. It will be emailed to you as soon as it is complete. It’s best to use an agent, such as SwiftReg to take out the hassle of the process, especially if you have not used E-filing before.
After the first employee is employed, the employer must register within 7 business days. The form that is submitted is called a W As 2 with all the necessary information filled in that it required. You can retrieve these forms on the department of labour’s website. Once the necessary forms are collected, they need to be sent to the department of labour. Once received, the registration process can take 21 business days. If the business has a separate branch, an entirely separate registration needs to take place. If there has been an arrangement made beforehand with the compensation commissioner this will not be necessary.
The letter of good standing for the tax clearance is free with SARS (South African Revenue Service), but if you do not know how the process works or need assistance on e-filing you can have assistance from a third party, such as SwiftReg. The letter of good standing for COIDA (Occupational Injuries and Diseases Act) is only received when the annual returns for the assessment fees are paid annually. This fee will be based on the various different aspects such as the total earnings for the employees.