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Softa

Think Ahead.

An accounting system and education platform helping businesses understand records, taxes, and government regulations.

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💡 Did You Know?

Important tax insights for business owners

📅 Monthly Returns

Bilingual guidance (Swahili & English) with key points for quick learning.

🏢 How to Start a Business

A simple step-by-step guide using the most common process: Registration Authority → Tax Authority → Business Licence → Permits → Records.

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✅ Golden rule: If you keep records from day one, taxes become easy and your business becomes bank/loan ready.
1

Choose your structure

This affects ownership, risk, taxes and reporting.

  • Sole Trader / Individual Business
  • Partnership
  • Company (Limited / Public)
  • NGO / Nonprofit
2

Register the business name

Apply through the Business Registration Authority (often online).

  • Pick 2–3 name options
  • Owner/director details
  • Address & contacts
3

Incorporate (if a company)

Companies usually require formal documents and ownership setup.

  • Memorandum & Articles (or equivalent)
  • Shareholders & directors
  • Share capital/ownership plan
4

Register with the Tax Authority

Get your tax ID (often called TIN) and confirm applicable taxes.

  • TIN (tax identification)
  • VAT registration (if required)
  • Payroll registration (if hiring)
5

Business Licence + Permits

Most businesses require a licence and some need sector permits.

  • Proof of premises
  • Proof of tax registration
  • Sector permits (if regulated)
6

Open a bank account + start records

Separate business money and record every transaction.

  • Business bank account
  • Receipts and invoices
  • Use Softa daily (sales, purchases, expenses)
Tip: Act like a big business early — clean records make you trusted by customers, banks and investors.

📄 Common documents required

  • Owner/Director identification
  • Business address & contacts
  • Proof of premises (rent agreement/title)
  • Company documents (if company)
  • Business plan/description (sometimes)
Keep a single folder (physical + digital) for all documents.

✅ Setup checklist

  • Business email + phone line
  • Business bank account
  • Invoice/receipt format
  • Accounting method (cash or accrual)
  • Payroll setup (if employing staff)
  • Industry permits (if required)
Softa helps you keep invoices, receipts and records organized.

📘 Accounting standards

Standards are rules for preparing financial statements. The applicable standard depends on your size and regulation.

  • IFRS — often for larger/audited companies.
  • IFRS for SMEs — simplified reporting for small/medium businesses.
  • Local GAAP — national standards in some countries.
  • Nonprofit reporting — donor/regulator reporting requirements may apply.
Best habit: record daily transactions correctly.

🧠 What to track (for compliance)

  • Sales: cash & credit
  • Purchases: supplier invoices
  • Expenses: with receipts
  • Inventory: stock in/out
  • Assets & liabilities
  • Reports: profit, cash flow, balance sheet
Clean records = easy reporting and easy tax filing.

🧾 Taxes (Tax Authority)

Most Tax Authorities focus on these categories:

  • Income/Corporate tax — based on profit.
  • VAT — based on sales (thresholds/sector rules apply).
  • PAYE / payroll taxes — when you employ staff.
  • Withholding tax — rent, services, dividends, interest, etc.
  • Local levies — depends on business and location.
Record everything + file on time = fewer penalties.

📌 Simple tax habits

  • Separate business money from personal money
  • Keep receipts for every expense
  • Issue receipts/invoices for every sale
  • Track stock movements
  • Review monthly (sales, expenses, profit)
  • Prepare returns early
Softa makes these habits easy to follow.
Limited Company (Private)

Owned by shareholders and managed by directors. Liability is usually limited to what owners invested.

  • Standards: IFRS for SMEs (common) or IFRS (bigger/audited).
  • Tax Authority focus: corporate tax, VAT (if registered), payroll, withholding.
Public Company

Can raise capital from the public and usually has stricter governance and reporting.

  • Standards: IFRS + audits (commonly required).
  • Tax Authority focus: corporate tax, VAT, payroll, withholding + dividend rules.
Unlimited Company

Owners may be personally responsible for debts. Higher risk and less common.

  • Standards: IFRS/IFRS for SMEs/local GAAP depending on size.
  • Tax Authority focus: similar tax families, but risk exposure is higher.
NGO / Nonprofit

Mission-first. Surplus is reinvested into the mission rather than paid as dividends.

  • Standards: nonprofit/donor reporting requirements may apply.
  • Tax Authority focus: exemptions may exist, but payroll/withholding/VAT may still apply.