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Thread: Registering an existing business for tax

  1. #1
    Junior Member
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    Registering an existing business for tax

    Good Afternoon,

    I have been asked to help a client register their existing business for tax. It is complicated because the business has been running for a few years and the company has not kept an accurate record of business income/expenditure as it was small company that has only now begun to expand. The company was originally registed with CIPC as a CC but it was de-registered.

    How would I go about registering this business for tax and will there be any penalties incurred?

    Would the company have to register with CIPC again?

    Thank you


  2. #2
    Gold Member
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    Mar 2012
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    Jacky in all likelihood it is already registered for tax at SARS, because if it is de-registered at CIPC, then at the time that it was incorporated tax registrations were done automatically by CIPRO.

    Regarding the CIPC de-registration; you will need to have it "restored". There are a few threads on the site regarding this and the process you need to follow.

  3. #3
    Gold Member
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    Jun 2010
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    Ouch, that sounds messy. It'll be interesting to see what others have to say about this, but I suspect they'll be along the lines of the following:

    - Usually a company is automatically registered for tax when it registers with CIPC, although I have had this only happen on occasion, not every time. Make sure that SARS hasn't already allocated a tax number to the old cc.
    - They are going to have to come up with some sort of realistic approximation of their trading accounts for the past few years. This may require some time spent with SARS in getting them to agree with these figures.
    - It is possible to get a company reregistered after deregistration. I'm pretty sure the process is on the cipc website. Its a bit of a pain, but can be done. If you go this route, you will need to submit all the missing tax returns to SARS and yes there will most likely be penalties. If SARS has no record of this company, I guess you will have to register with them before submitting the returns.
    - Alternatively, you can register a new company now and start the process fresh. Everything that has happened until now will then be considered to have happened under the names of the cc members in their private capacity. This is essentially the result of the cc deregistration. So the last few years can then be recorded as sole prop income in their personal capacities. They will still need to declare this income and pay tax and penalties on it though. That can't be legally avoided.

    Lets see what others have to say.

  4. #4
    Bronze Member Beancounter's Avatar
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    Oct 2011
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    I agree with the take on SARS maybe having issued a tax number long ago and the restoration of the CC that the CIPC has deregistered.

    However, how on earth did the CC carry on trading with a valid bank account if the CIPC deregistered it? The banks are normally the ones to pick up a deregistration first and threaten to freeze the account if the CC or company is not restored ASAP. Perhaps make sure that the CC is not just "in deregistration process". This means that the Annual Returns have to be filed promptly to stop the deregistration process.

  5. #5
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    Louis Trichardt
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    Maybe this is the ideal situation to declare under the VDP programme?

  6. #6
    Full Member Intothedeepbluesea's Avatar
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    Western Cape
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