LEGISLATION
The Businesses Act 71 of 1991 governs the licensing and operation of businesses in South Africa. It sets the framework for local municipalities and councils to regulate business activities within their jurisdiction. The act stipulates that certain businesses must obtain a valid business or trade license to operate legally, ensuring that public safety, health, and regulatory standards are met.
Business trade license requirements are enforced nationwide through the National Business Act, while local permits and certificates are issued according to municipal by-laws. These by-laws may vary by location, and businesses must comply with the regulations of Metropolitan Councils, Local Town Municipalities, or District Councils, depending on their geographical area.
Departments involved in the licensing process include:
- Health and Safety: Ensuring food premises and the transport of food meet health standards.
- Noise and Air Pollution: Controlling and preventing pollution.
- Building Control Unit: Verifying compliance with the National Building Regulations and Building Standards Act 1977.
- Urban Planning Unit: Regulating land use rights.
- Public Safety and Emergency Services: Ensuring the safety of the public and business premises
This can include businesses under the following criteria
Certain types of businesses are legally required to possess a valid business or trade license to operate. This license ensures the business premises meet all regulatory requirements related to health, safety, and public welfare.
Businesses selling food for consumption on or off the premises, or selling any perishable foodstuff, are required to obtain a trade license.
Business Example:
- Restaurants
- Franchises
- Pubs and Grills
- Action Bars and Taverns
- Cocktail Lounges
- Sports Facilities
- Accommodation Facilities (such as Hotels, Guesthouses, Lodges)
Businesses offering specific health services or entertainment must also have a valid trade license.
This includes::
- Turkish baths, saunas, or other health baths
- Massage or infrared treatments
- Escort services (providing male or female escorts)
- Amusement arcades (businesses with three or more slot machines or other gaming devices)
- Snooker or billiard rooms (with three or more tables)
- Nightclubs or discotheques
- Cinemas or theaters
Examples of businesses requiring a license for health or entertainment services include:
- Health and beauty clinics
- Spas and saunas
- Massage parlors
- Laser and ultraviolet treatment centers
- Adult shops
- Nightclubs
- Cinemas and theaters
- Arcades and pool rooms
Businesses that sell foodstuffs or perishable goods from a movable structure, stationary vehicle, or on public roads require a trade license. This includes businesses that transport or deliver meals to consumers.
Examples of businesses requiring a license for hawking include::
- Hawkers
- Food stalls
- Food vending trailers and vehicles
- Transport services for meals
IMPORTANT NOTES ON BUSINESS TRADE LICENSES
Business licenses are renewable annually, based on the regulations of Metropolitan Councils, Local Town Municipalities, or District Councils. The renewal process ensures ongoing compliance with local by-laws.
A trade license may be withdrawn or suspended if the business fails to comply with specific endorsements or regulatory standards. Regular inspections may be conducted to verify compliance.
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and shop hours; to make certain new provisions regarding such licensing and carrying on of businesses, and to provide for matters connected therewith.
Business or trade license requirements are governed by the National Business Act and apply throughout the country, whereas permits and certificates are generally issued in terms of local authority by-laws. These by-laws tend to differ, depending on the location of the business by either, Metropolitan Councils, Local Town Municipalities, or District Councils.
Various Metropolitan, District, and or Local Town Municipalities departments are involved in the process, and the business owner needs to comply with all relevant laws including;
✔ Health and Safety – Applicable to the requirements for food premises and the transport of food
✔ Noise and air pollution – Applicable to the control and prevention of noise and air pollution
✔ Building Control Unit – Applicable to building control in compliance with the National Building Regulations and Building Standards Act, 1977
✔ Urban Planning Unit – Applicable to land use rights
✔ Public Safety and Emergency Services – Applicable to public safety.
This can include businesses under the following criteria
The carrying on of business by the sale to consumers of –
- Any foodstuff in the form of meals for consumption on or off the business premises; or
- Any perishable foodstuff.
Business Example:
Places that serve food, provide takeaways, or transport meals like a Restaurant, Franchises, Pub and Grill, Action Bar, Tavern, Cocktail lounges, Accommodation Facilities, Sports Facilities, Hotel, Guesthouse, and or Lodge
The carrying on of business by –
- Providing Turkish baths, saunas, or other health baths.
- Providing massage or infrared treatments.
- Making the services of an escort, whether male or female, available to any other person.
- Keeping three or more mechanical, electronic, or electrical contrivances, instruments, apparatus, or devices that are designed or used for the purpose of playing any game or for the purpose of recreation or amusement, and the operation of which involves the payment of any valuable consideration, either by the insertion of a coin, token, or disc therein or in an appliance attached thereto or in any other manner.
- Keeping three or more snooker or billiard tables.
- Keeping or conducting a nightclub or discotheque; and
- Keeping or conducting a cinema or theatre.
Business Example:
Health and beauty clinics, spas, saunas, public baths, massage parlors, laser and ultraviolet treatment centers, adult shops, cinemas, nightclubs, pool rooms, arcades, and any business with three or more vending or slot machines.
The carrying on of business, whether as principal, employee, or agent, by selling any foodstuff in the form of meals or any perishable foodstuff –
- Which is conveyed from a place, whether by vehicle or otherwise.
- On a public road or at any other place accessible to the public; or
- In, on, or from a movable structure or stationary vehicle.
Business Example:
Hawkers, food stalls, transport meals, food vending trailers, and vehicles.
A Business Trade License or Application is not transferable at the change of ownership (When the Business is Sold) or from one premise to another (When the Business is relocated). The Business Trade License is “Renewable” annually, by the Metropolitan Councils, Local Town Municipalities, or District Councils, depending on the geographical area and by-laws of the Council and or Municipality.
A trade license can be withdrawn or suspended if not complying with endorsements. Once the trading license has been granted, your premises may be inspected from time to time.