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February 2, 2023 at 9:07 pm #109959
South African law allows individuals to run their business via several types of legal entities, which are categorised as either profit or non-profit. Whilst not set in stone, choosing the non-profit route may be better suited for a club as there is a focus on community upliftment and harm reduction. However, even if you chose a for-profit legal entity such a (Pty) Ltd, you are definitely still able to help your community with your club’s excess profits i.e. donating to charities.
Choosing between the legal entities each carry their own advantages and disadvantages, so we recommend speaking to a professional such as an accountant or lawyer depending your on your needs.
You may be thinking that running a club through a legal entity provides more evidence against you should there be a bust. You are partly right, but it does also provide evidence that you are not running a sinister criminal empire, but rather a small club that focuses on privacy and harm reduction whilst giving back to the community through non-profit initiatives. Also running it as an entity, forces you to have more systems in place i.e. keeping accounting information up to date, which in turn de-risks your club from the dangers mentioned previously.
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