LSB2605
ASSIGNMENT 2
SEMESTER 2 2026
UNIQUE NO. 279509
DUE DATE: 8 SEPTEMBER 2026
, Legal Aspects of Small Businesses - LSB2605
Assignment 2 Semester 2 2026
QUESTION 1.1 – Statement A
Statement A is incorrect. Although a sole proprietorship is not a separate legal person,
this does not mean that Nomvula has no employer obligations. A sole proprietor must
include the business income in her own income-tax return, but, once she employs
workers, she must comply with the relevant employer-tax requirements. SARS states
that an employer must register for employees’ tax within 21 business days after
becoming an employer, unless none of the employees are liable for normal tax.
Nomvula must also register for UIF where applicable and submit the required employer
declarations. Therefore, operating as a sole proprietor does not remove her statutory
employer obligations.
QUESTION 1.2 – Statement B
Statement B is incorrect. The UIF contribution is not payable in respect of a worker
who is employed for less than 24 hours per month by a particular employer. Kagiso
works approximately six hours per month and therefore falls outside the UIF system.
Nomvula should consequently not deduct the 1% employee contribution from
Kagiso, nor pay the corresponding 1% employer contribution for her. The source is
section 4(1)(a) of the Unemployment Insurance Contributions Act 4 of 2002, which
excludes employees employed for less than 24 hours a month and their employers. The
general UIF contribution is normally 1% from the employee and 1% from the employer,
but the exclusion applies to Kagiso.
QUESTION 1.3 – Statement C
Statement C contains two errors. First, merely having employees does not
automatically make Nomvula liable for the Skills Development Levy (SDL). An
employer is generally liable only where total remuneration subject to SDL exceeds R500
000 in the relevant 12-month period, with SDL calculated at 1% of payroll. Nomvula’s
ASSIGNMENT 2
SEMESTER 2 2026
UNIQUE NO. 279509
DUE DATE: 8 SEPTEMBER 2026
, Legal Aspects of Small Businesses - LSB2605
Assignment 2 Semester 2 2026
QUESTION 1.1 – Statement A
Statement A is incorrect. Although a sole proprietorship is not a separate legal person,
this does not mean that Nomvula has no employer obligations. A sole proprietor must
include the business income in her own income-tax return, but, once she employs
workers, she must comply with the relevant employer-tax requirements. SARS states
that an employer must register for employees’ tax within 21 business days after
becoming an employer, unless none of the employees are liable for normal tax.
Nomvula must also register for UIF where applicable and submit the required employer
declarations. Therefore, operating as a sole proprietor does not remove her statutory
employer obligations.
QUESTION 1.2 – Statement B
Statement B is incorrect. The UIF contribution is not payable in respect of a worker
who is employed for less than 24 hours per month by a particular employer. Kagiso
works approximately six hours per month and therefore falls outside the UIF system.
Nomvula should consequently not deduct the 1% employee contribution from
Kagiso, nor pay the corresponding 1% employer contribution for her. The source is
section 4(1)(a) of the Unemployment Insurance Contributions Act 4 of 2002, which
excludes employees employed for less than 24 hours a month and their employers. The
general UIF contribution is normally 1% from the employee and 1% from the employer,
but the exclusion applies to Kagiso.
QUESTION 1.3 – Statement C
Statement C contains two errors. First, merely having employees does not
automatically make Nomvula liable for the Skills Development Levy (SDL). An
employer is generally liable only where total remuneration subject to SDL exceeds R500
000 in the relevant 12-month period, with SDL calculated at 1% of payroll. Nomvula’s
