Business Licensing Bill

Sapo submitted comments to the Department of Small Business on the Business Licensing Bill on 28 November 2025.

The bill proposes that every business, from small startups to larger enterprises, must register with local municipalities and obtain a licence valid for five years. Inspectors would have broad powers to demand proof of a licence at any time, issue fines, or confiscate goods if businesses are found in violation.

• 1.  The Bill, in its current format, contains a number of errors and deficiencies of a legal nature, some of which will be expounded upon below.

• 1.1 In section 1 a “non-citizen” is defined as meaning “any natural or juristic person who is not a South African citizen”. If regard is had to the provisions of the South African Citizenship Act, 88 of 1995, it is immediately apparent that a juristic person cannot hold South African citizenship, as this Act only provides for citizenship to be held by natural persons. As a result, this definition is flawed, and requires amendment.
• 1.2 Section 4 of the Bill provides that any business that has been designated by the Minister is to obtain a business licence as provided for in section 6. Section 4(2) of the Bill empowers the Minister to designate a business undertaking as requiring a business licence if such business undertaking falls within “the scope of the functional areas listed in Schedule 4 to the Constitution”.
• 1.3 If regard is had to the provisions of Schedule 4 of the Constitution, read together with, inter alia, section 44 of the Constitution, it is readily apparent that Schedule 4 sets out various functional areas where both national and provincial legislatures may adopt legislation to properly regulate such functional areas. The aim of Schedule 4 was clearly not to provide for various types of businesses. This is readily apparent by considering certain of the items listed in Schedule 4. These include consumer protection, media service directly controlled or provided by the provincial government, police, public works, and traditional leadership. Part B of Schedule 4 refers to, inter alia, building regulations, municipal airports, municipal health services and municipal public transport.
• 1.4 If regard is had to the examples mentioned above, it is readily apparent that Schedule 4 does not refer to industries within which businesses operate, but rather legislative areas which may be regulated by national and provincial government respectively. As an obvious example, it is inconceivable that “media services directly controlled or provided by the provincial government” would require a business licence as provided for in the Bill. Also, it is uncertain under which category many businesses will fall, e.g. where would a shoe repair shop be classified?
• 1.5 Accordingly, simply referring to Schedule 4 of the Constitution in section 4 of the Bill is insufficient to create certainty regarding the types of businesses that may be regulated by the Minister. Schedule 4 was simply never meant to be used in such a manner.
• 1.6 Section 6 of the Bill is similarly fraught with difficulties. Whilst section 6(1) provides that a licencing authority may issue a business licence (i.e. permissive, not peremptive), section 6(4) is peremptive in that it is stated that a licence authority must issue a business licence unless certain criteria are met. This obviously creates confusion.
• 1.7 Section 6(4) is seemingly in conflict with the provisions of section 9 of the Bill. If section 9 is considered, it seems as if a licencing authority may refuse to issue a business licence if, for instance, past unjust development imbalances are not redressed. Section 6(4), however, provides a narrow,closed list, of situations where a licence may be refused. On a reading of section 6(4), it seems as if a licencing authority will not have any discretion regarding the issuing of a business licence or not.
• 1.8 Sections 20 and 21 provide inspectors appointed in terms of the Bill very wide powers regarding entering of premises, questioning of persons, and confiscating and removing goods, even in the absence of warrants. These powers are too wide for the purposes envisioned in the Bill. Given our country’s troubled past, the issues of warrantless searches and seizures are dealt with in a very serious manner by the courts, and are generally frowned upon, unless very good reason exist to depart from due administrative and legal process, as required by the Constitution. These sections similarly require amendment.
• 1.9 Section 30 of the Bill, which seeks to regulate street trading, improperly infringes upon an exclusive local government competence. Part B of Schedule 5 to the Constitution provides that, inter alia, street trading, is to be regulated by local authorities.

• 8. The foregoing SAPOA comments are not exhaustive of the various issues with the Bill, but merely an indication that the Bill is substantially flawed in its current format.
• 9. SAPOA therefore respectfully submitted that the Bill will not bear constitutional muster in its current format, and ought to be withdrawn.