Results 1 to 2 of 2

Thread: Small Business Corporation Requirements - other CC dormant

  1. #1
    Silver Member
    Join Date
    Sep 2012
    Location
    Louis Trichardt
    Posts
    262
    Thanks
    52
    Thanked 39 Times in 35 Posts

    Small Business Corporation Requirements - other CC dormant

    Good morning guys,

    According to Section 12E of the Income Tax Act, one of the many requirements to qualify as a small business corporation are that :

    "... none of the shareholders or members at any time during the year of assessment of the company, close corporation or co-operative holds any shares or has any interest in the equity of any other company as defined in section 1 (other than-
    ...
    (hh) any company, close corporation or co-operative if the company, close corporation or co-operativeó
    (A) has not during any year of assessment carried on any trade..."

    I have a case where the return has already been submitted that a PTY is not a Small Business Corporation. The area I am uncertain about, is that both members are members in another CC, but it is a CC that has not been trading for a while now.

    Have any of you dealt with a similar situation, or are you able to guide me on whether I should do a request for correction on this return?

  2. #2
    Gold Member
    Join Date
    Mar 2012
    Location
    Vanderbijlpark
    Posts
    886
    Thanks
    83
    Thanked 381 Times in 298 Posts
    Sec (hh)(A) was inserted to make provision for shelf companies and not to make allowance for dormant companies, which is effectively what you are referring to.

    Do you know if the cc is still "in business" at CIPC, or is it de-registered?

    The "wrong" bit has already been done so your choices are leave it, or to request a correction.

    If it had been submitted correctly, would there have been any tax liability? If not, I would be inclined to hold my thumbs and leave it.

Similar Threads

  1. Legal requirements for MLM business
    By mikren in forum MLM Industry Forum
    Replies: 1
    Last Post: 04-Mar-13, 10:06 PM
  2. Scavengers on Dormant Cell phone contracts.
    By Candy Bouwer in forum The Whistleblower Forum
    Replies: 6
    Last Post: 15-May-12, 04:04 PM
  3. Small business help
    By Major in forum Tax Forum
    Replies: 5
    Last Post: 21-Aug-11, 12:39 AM
  4. [Question] Tax on Small Business
    By Ant15 in forum Tax Forum
    Replies: 3
    Last Post: 13-Jun-11, 11:15 AM
  5. Can a CC be kept dormant and how?
    By solweb in forum General Business Forum
    Replies: 3
    Last Post: 06-Aug-10, 09:45 AM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •