Registering a New Business - Pty Ltd vs CC (Can we still CC?)

L

luxe

Expert Member
Joined
Mar 19, 2010
Messages
2,453
Reaction score
3
Hi,

I am in the position where I am leaving the corporate world, to start my own business.

I have a business plan, and about 80% of the finances, and I would like to register the company, so that I can apply for certain licenses, affiliations and accreditation.

I was under the impression that one could no longer register a Closed Corporation, but almost every local small business site still has that as an option.

Could someone clarify the CC question for me, and perhaps advise on the best people to talk to register my business (and with SARS) so that I can get cracking on making my dream a reality?

I appreciate the help!
 
I'll answer my own question, since this will probably come up in google.

CC in SA is gone.

Visit http://www.cipc.co.za for company name reservation, and registration.
 
You can still buy shelf CCs from some companies and they will remain valid for a few years (can't recall the exact dates). To be honest though, your business registration is dependant on a number of things, from turnover, tax efficiencies, liability exposure, number of directors/shareholders, voting rights etc. These NEED to be taken into account beforehand. I cannot stress this point enough and you need to think long term.

Remember that limited companies require audited financials and the costs are higher, but they have their benefits...
 
Hey DJ,

For now, its a one man show, with the possibility of one other shareholder who will purchase equity in the business as a trade off for start up cash.

The nature of the business means that it will be a small business for a while, which will also pay excise to the government, tax to SARS and yearly licensing fees. Other than that, the foreseeable future makes me believe it will be just me for a while, and I won't be permanently employing anyone for at least a year, if not more.

Any resources you trust you can direct me to to learn more?
 
Hey Luxe,

You are 100% correct that the cc's are now a thing of the past. The guys online will still have some shelf cc's available, so you can theoretically still get a cc. From what I recall the DTI has opened a voluntary conversion from cc to pty ltd, which does what it says and otherwise cc's will slowly fade away as they run their course.

The new companies act has created a couple new forms of companies, but the short and tall is that unless you secure some serious public funding and/or envisage some seriously high turnover you won't need to be audited, simply reviewed, this being pretty much the same as was required for a cc.

I suggest using one of the shelf co vendors to register a new pty for you. Should be around R800, depending on how urgently you need it and how particular about what the name is going to be registered as.

You starting a brewery ;)

PM me if you want more info
 
Last edited:
Hey SukkaFoo,

Thanks for the info.

I have no problem with it being a Pty Ltd, I doubt I will make enough for the first year to warrant an audit.

Regarding the shelf co vendors, is this really a better option? I mean, I could end up with Boris Enterprises CC, trading as " My Company Name". Is that the only downside?
I am looking carefully at the CIPC stuff, seems I can reserve a name for R50 (creditable) and then R175 to do the Notice of Incorporation, and I should get the name I want.

Any downsides to doing it myself?

Oh, and you might be right on your guess ;)
 
Hey Luxe,

I can assist you with basically all of your questions. I have my own business after following a similar move you plan. If you want you can pm me your details and we can have a chat.
 
Umm, tbh, unless you are super tight on cash, it really isn't worth the effort. The CIPC have had some serious teething problems instarting up (a mate of mine waited 4 months for a change of directorship, which used to be immediate), but they have improved a bit now.

WRT to the name issues, there really is no hassle using a registration name and trading as something else completely. The shelf co's normally are just numbered to differentiate them. The shelf co guys will do the reg for you as well if you dont want to go the shelf route, and what I was referring to above was that they will have pre registered names, so you dont have to wait to see if your name is accepted. The other thing to note is that you need to supply a couple of naming options and pay the R50 per option (dont quote me 100% on this, but I am pretty sure). My advice on this is to really just use one of the pre-registered names and then they will register a new co with this name and issue the shares to you. I checked now and this would be around R1100, and like I say, its worth the probably R500 extra you may end up paying over doing it yourself
 
The name isn't all that important as you can trade under your own company name. Good advice from SukkaFoo...
 
Fair enough, thanks for the tips.

Are there any legal requirements for the "trading as" part, I can't seem to find anything around this.

I found a shelf pty ltd for R625, registered this year, I just need clarity on the trading as bit.
 
luxe said:
Fair enough, thanks for the tips.

Are there any legal requirements for the "trading as" part, I can't seem to find anything around this.

I found a shelf pty ltd for R625, registered this year, I just need clarity on the trading as bit.
Click to expand...

My company law is kinda rusty on this, but as I recall, no. Just don't go do anything stupid like trade as apple computers or something like that. Wrt the co reg, it may be quicker to register a new co, since a shelf co needs the change of directorship. Also, like anything else, do some homework on the co doing the reg for you if it isn't an audit firm, law firm or one of the big shelf co resellers.

Re the brewery side of things, have you started the license application process yet? What kind of equipment do you intend using? Projected output? No need to answer, just curious, since I have researched this heavily and think its the most awesome co in the world to start...
 
Luxe,

With CPA you cant trade as any more and need to register the name as your own.

You can however register a company without a name and use the registration number as your "name" until you have a proper name registered
 
danlr said:
Luxe,

With CPA you cant trade as any more and need to register the name as your own.

You can however register a company without a name and use the registration number as your "name" until you have a proper name registered
Click to expand...

Evidently this process hasn't been implemented by CIPC just yet, or at least if it has been done then it's a stuff up still? It seems to still be a bit of a grey area, and best bet is to register the name correctly from the get go if you have the time to wait, or as you say do it without a name for the time being.
 
Thanks.

I am gonna do the proper correct name reservation and Notice of Incorporation through CIPC. I have time (a little), and then I can have the right name, and the correct directorship etc.

Sukka - I'll pm you around your questions.

RE: SARS. Once I have my company registration, I just phone SARS , ask, and pay for VAT registration? Isn't there a threshold where you dont have to pay VAT....I need to do some research on VAT.

Anyone know how long CIPC takes for name reservation and registration?
 
luxe said:
Thanks.

I am gonna do the proper correct name reservation and Notice of Incorporation through CIPC. I have time (a little), and then I can have the right name, and the correct directorship etc.

Sukka - I'll pm you around your questions.

RE: SARS. Once I have my company registration, I just phone SARS , ask, and pay for VAT registration? Isn't there a threshold where you dont have to pay VAT....I need to do some research on VAT.

Anyone know how long CIPC takes for name reservation and registration?
Click to expand...

If your turnover is less than R1million per annum, you don't have to register for VAT
 
SARS is a nightmare... Carbon is correct, but there are benefits to registering for VAT if you want to trade with larger organisations or you have high capital costs up front. The problem is SARS refuses to register a new entity for VAT unless you have traded for a while and can prove, with bank statements, that you have sufficient turnover. They will however allow you to claim input VAT for pre-registration expenses on your first return.

There are other considerations re a new business registration from a tax perspective, re small business allowances and the possibility that turnover tax may be a better option if the business is REALLY small.
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X