There are big tax benefits available to companies that qualify as small business corporations. It is wise to determine whether your business qualifies so that you can take advantage of these reduced tax rates. There is an extensive list of requirements that must be met before a company can qualify as a small business corporation. Some of the major requirements are: • The business must be a private company, CC, co-operative or personal liability company; • The business cannot have an annual gross income that exceeds R20m; • The shareholders of the business cannot be shareholders in other companies (though there are certain exceptions, including owning shares in a listed company); • All shareholders must be natural persons, ie individuals; and • Not more than 20% of total receipts of the business can be investment income and income from rendering a personal service (there are exceptions to this general rule). The tax benefits to small business corporations are best illustrated by mean...

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