Business While Waiting for CIPC

AntennaMan

AntennaMan

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Good evening

I have an idea for an online business, ie selling goods/services online. Not the most unique idea, but there is a possibility of making some money.

I have started the process of registering with CIPC and opening a business banking account. These two seem to go hand-in-hand. The bank want your company details before opening the account.

But I am an impatient man and want to get going asap. Is it legally possible to start trading in some fashion while waiting for the company registration process to run its course?
 
YingYang said:
Yes
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Thanks for the concise answer! :)

Without the business account, how would one go about paying suppliers and receiving payment from clients? Do you just use your private bank account in the mean time?
 
Essentially trading as a sole proprietor until CIPC is sorted
 
AntennaMan said:
Good evening

I have an idea for an online business, ie selling goods/services online. Not the most unique idea, but there is a possibility of making some money.

I have started the process of registering with CIPC and opening a business banking account. These two seem to go hand-in-hand. The bank want your company details before opening the account.

But I am an impatient man and want to get going asap. Is it legally possible to start trading in some fashion while waiting for the company registration process to run its course?
Click to expand...

It shouoldn't take more than a week to open a company. CIPC is pretty quick these days.
 
momo786 said:
Essentially trading as a sole proprietor until CIPC is sorted
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Do not do this. Might get messy. Rather conclude pre-incorporation contracts. Contracting on behalf of the company yet to be formed, its allowed by section 21 of the Companies Act
 
koeksGHT said:
Do it through FNB, they register CIPC and get your account with them.
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This is what I'm doing. Applied yesterday in the early hours of the morning, but I'm still waiting for the promised email about what documentation they require.
 
St Eti1 said:
Do not do this. Might get messy. Rather conclude pre-incorporation contracts. Contracting on behalf of the company yet to be formed, its allowed by section 21 of the Companies Act
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Business economics was almost 2 decades ago and things have changed since then. Can you maybe explain this in a noob-friendly way?
 
AntennaMan said:
Business economics was almost 2 decades ago and things have changed since then. Can you maybe explain this in a noob-friendly way?
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Will try. A company is a separate legal person to its directors and shareholders. Which means a company can sue and be sued in its own name, contract and incur liabilities in its own name, own property, etc.

Big advantage of a company is limited liability. So if something goes wrong, the company is sued, your estate generally being safe from creditors. Similar to a cc, and way different to a partnership, where the assets of individual partners can be attached to satisfy the partnership's debts. Likewise, a sole proprietorship has unlimited liability, the owner is personally liable for the debts of the business.

I assume you like the idea of limited liability, thus you are incorporating a company. So why contract in your own name while waiting for cipc, when you can contract in the unincorporated company's name? I am not sure what you are selling, but I would think tax is also a factor. But with tax I am as nooby as anyone.
 
St Eti1 said:
Will try. A company is a separate legal person to its directors and shareholders. Which means a company can sue and be sued in its own name, contract and incur liabilities in its own name, own property, etc.

Big advantage of a company is limited liability. So if something goes wrong, the company is sued, your estate generally being safe from creditors. Similar to a cc, and way different to a partnership, where the assets of individual partners can be attached to satisfy the partnership's debts. Likewise, a sole proprietorship has unlimited liability, the owner is personally liable for the debts of the business.

I assume you like the idea of limited liability, thus you are incorporating a company. So why contract in your own name while waiting for cipc, when you can contract in the unincorporated company's name? I am not sure what you are selling, but I would think tax is also a factor. But with tax I am as nooby as anyone.
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Limited liability is exactly what I'm after. The question is then how to go about using the unincorporated company name to transact if I can't open a bank account in that name?
And I'm planning on selling digital goods, so I am planning on seeing someone shortly regarding taxes.
 
AntennaMan said:
Limited liability is exactly what I'm after. The question is then how to go about using the unincorporated company name to transact if I can't open a bank account in that name?
And I'm planning on selling digital goods, so I am planning on seeing someone shortly regarding taxes.
Click to expand...

Tough one. I suppose you could use your personal bank account in the meantime and just transfer over to business when ready. Try to still contract in the company's name though. But maybe you should wait until you have received proper tax advice.
 
St Eti1 said:
Tough one. I suppose you could use your personal bank account in the meantime and just transfer over to business when ready. Try to still contract in the company's name though. But maybe you should wait until you have received proper tax advice.
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I think I'll use my own bank account to set up the website and associated servies, but won't start transacting until CIPC is registered. This gives me some time to get everything perfect.

Thanks for all the advice.
 
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