The informal economy in SA accounts for billions in revenue – in 2015, Statistics SA credited the informal economy as contributing over 5% of national Gross Domestic Product, and nearly 3 million South Africans work in the informal sector.1 A large proportion of this is made up of the taxi industry, and casual labourers, but a substantial part of this economy also consists of spaza shops, shebeens and similar businesses.

The Business Act 19912 makes provision for the licensing of businesses, and matters connected therewith. It falls under the authority of the Minister of Trade, Industry and Competition; but, practically, the administration of the Act has been assigned to provincial administration.

The administration in each province can appoint a licensing authority to undertake the licensing of businesses – which includes the sale or supply to consumers of food and foodstuffs, massage parlours, amusement arcades, night clubs, cinemas, adult entertainment facilities, and the like.3

  1. It is an offence to carry on business unless you are the holder of an appropriate licence.4 5

  2. It is also an offence to carry on business in contravention of any condition of a licence issued to you.6

  3. The holder of a licence is guilty of an offence even if another person in control of the business, or a director, manager, employee or agent of the business, conducts it in such a way as to breach any condition of the licence.7

  1. See the paper ‘Informal Sector Employment: Policy Reflections’ by Caroline Skinner, available at Caroline Skinner was then a Senior Researcher at the African Centre for Cities at the University of Cape Town. 

  2. In terms of the Act, regulations and by-laws can be promulgated which govern businesses, particularly in the informal sector. It is beyond the scope of this book to address these delegated laws. 

  3. Sports clubs, and charitable, religious, educational, cultural and agricultural institutions are exempted if all profits are devoted to the purposes of the institution. 

  4. This can also mean you must have a hawker’s licence if you are a hawker of food. 

  5. Section 2(3) read together with section 5(1). 

  6. Section 2(3) read together with section 5(1). 

  7. Section 5(2).