I opened a Pty Ltd by mistake, now what...

[fire2029]

I opened a Pty Ltd company too prematurely. Specifically, I realised that it will be better and easier to trade as sole trader in personal name for a while still before I make use of the Pty Ltd.

I have opened up and signed up for pty ltd with me as sole director, my questions,
- Can I simply leave it there with no activity? No bank accounts, no accountant, no tax returns
- Or should I close it?

Thanks

 

[HowTo]

I opened a Pty Ltd company too prematurely. Specifically, I realised that it will be better and easier to trade as sole trader in personal name for a while still before I make use of the Pty Ltd.

I have opened up and signed up for pty ltd with me as sole director, my questions,
- Can I simply leave it there with no activity? No bank accounts, no accountant, no tax returns
- Or should I close it?

Thanks

Hi, after a while or so it will be closed by itself.

 

[DapperDanMan]

Welcome to the Big Leagues!

 

[fire2029]

Hi, after a while or so it will be closed by itself.

How long can it stay "dormant"?

 

[The Darkness]

I opened a Pty Ltd company too prematurely. Specifically, I realised that it will be better and easier to trade as sole trader in personal name for a while still before I make use of the Pty Ltd.

I have opened up and signed up for pty ltd with me as sole director, my questions,
- Can I simply leave it there with no activity? No bank accounts, no accountant, no tax returns
- Or should I close it?

Thanks

It's never premature. Learn the benefits of the company and lean into them, especially that your maximum tax directive is 27%. From there you can design company policy and create a separation between yourself and your business activities. Get an accountant to help you when working out your personal income.

 

[rvZA]

Hi, after a while or so it will be closed by itself.

No.

You need to de-register it.

This will have tax implications even if the company is not active.

 

[Snyper564]

No.

You need to de-register it.

This will have tax implications even if the company is not active.

tax implications from an admin perspective not really a payment perspective as there is no income

 

[fire2029]

tax implications from an admin perspective not really a payment perspective as there is no income

In what way? Still need to file tax returns?

 

[Snyper564]

In what way? Still need to file tax returns?

yeah so get it closed asap. would just be nil returns tho

 

[homeboy]

In what way? Still need to file tax returns?

I also want to know, I opened a company but it's going no where.

 

[Snyper564]

Always easier to just run the business in your own name as a sole prop.

All deductions etc from a tax perspective are allowed so always easier starting with tat.

 

[Charlesjjm]

I opened a Pty Ltd company too prematurely. Specifically, I realised that it will be better and easier to trade as sole trader in personal name for a while still before I make use of the Pty Ltd.

I have opened up and signed up for pty ltd with me as sole director, my questions,
- Can I simply leave it there with no activity? No bank accounts, no accountant, no tax returns
- Or should I close it?

Thanks

Submit your annual return on CIPC. If there's no activity, it's around R100 per year.

Submit your prov tax and income tax returns on E-filing. It should all be nil returns in any case.

Don't just leave it.

 

[Herr der Verboten]

I opened a Pty Ltd company too prematurely. Specifically, I realised that it will be better and easier to trade as sole trader in personal name for a while still before I make use of the Pty Ltd.

I have opened up and signed up for pty ltd with me as sole director, my questions,
- Can I simply leave it there with no activity? No bank accounts, no accountant, no tax returns
- Or should I close it?

Thanks

I opened this thread by mistake, now what...

 

[Greg C]

And will he receive fines from sars for not submitting tax returns, annual returns and uif reports?

None of the above
If you opened the company in mistake, just leave the company. After 12 months from reg, it will require a nill return and annual return fee to keep the entity registered. If not paid, company gets de-registered

To answer some of the repercussions - There are none. You dont get penalised, there are no fees further if you dont want to use the company.
Just note though, should you want to use it later and its in deregistration process or AR final de registration its a pain. This is precisely why most people just continuously open up new businesses but regularly and often most dont get used.

Think nothing of it by not using your PTY

My 2c - You may feel at this moment its better to do it through a sole prop - whilst your decision, its not the best route to take. Atleast the Company, however small your business may be, the PTY is its own juristic entity and your tax isnt muddled into one as a sole prop. I would use the company and start showing its history, fees etc. Even if its small. You will thank me down the line. But up to you ultimately

 

[RedViking]

See if you can make a profit also by mistake and one day you can buy X (formerly known as a Twitter, lol)

 

[chloroformaa]

None of the above
If you opened the company in mistake, just leave the company. After 12 months from reg, it will require a nill return and annual return fee to keep the entity registered. If not paid, company gets de-registered

To answer some of the repercussions - There are none. You dont get penalised, there are no fees further if you dont want to use the company.
Just note though, should you want to use it later and its in deregistration process or AR final de registration its a pain. This is precisely why most people just continuously open up new businesses but regularly and often most dont get used.

Think nothing of it by not using your PTY

My 2c - You may feel at this moment its better to do it through a sole prop - whilst your decision, its not the best route to take. Atleast the Company, however small your business may be, the PTY is its own juristic entity and your tax isnt muddled into one as a sole prop. I would use the company and start showing its history, fees etc. Even if its small. You will thank me down the line. But up to you ultimately

Thanks for your detailed reply on this...can u plz tell me few things pointwise:
1. If someone opens a company by mistake and doesn't file SARS provincial or final return, is it still ok as company will be de-registered the next year as annual return won't be submitted to SARS..

2. If someone has a small company and small income and files annual returns to CIPC, but doesn't file tax returns , is it ok as company is very small .?..i have read on various other forums that SARS doesn't give any trouble in this case as company is making very small income...has anyone succeeded in doing this .?..
B. What if company makes no income at all and the owner just does annual filing every year to keep the company registered but doesn't file any tax return at all..is this ok?

3. If someone wants to not give the financial statements while filing the annual return with CIPC , where and what form one has to fill?and one can do this only if company is very small .?.

4. What happens to business bank account .if business bank account is opened on company name, will they close it or convert it into sole proprietorship?..bcoz in sole proprietorship, name can't be business name..it can only be "customer name" or "customer name trading as business name.."..what i think is that bank will not do anything to it , and one can still use the business bank account which is in business name to do business as a sole trader ..what do you think..

Regards..