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Thread: Sub-divisions to a company

  1. #1
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    Sub-divisions to a company

    Hi Guys.

    What is the best way to go about this.
    What I mean is say for example you have Closed Corp named X.

    You now want to also trade as aX, bX, cX, dX, eX and fX

    For example, X sells a huge variety of clothes, shoes, etc to the public.

    But now you want aX to deal solely with selling to business.
    bX to sell only shoes to the public
    cX to sell only clothes to the public
    etc, etc

    One way I was thinking of is to create a pty ltd for each subdivision so that the CC owns the shares, however this is very costly as you need auditors for pty ltd's, etc.

    Each subdivision may or may not have separate employees, but each sub division will definitely target a more specific market and will have a different business image to the main company and other divisions?

    You could say something similar to the Media24 group i.e. Finance24, motors24, etc, etc.

    Regards

    Itai
    If you need any Accounting, Tax or even Financial Management advice, PM me and I'll try help and keep your information confidential.

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    Site Caretaker Dave A's Avatar
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    You could have seperate brands within the same single ownership.
    You could have multiple companies with a holding company tying them together.

    One thing I'll warn about now - managing multiple entities is quite a challenge. There are issues that crop up that you don't get in the single cell business entity.

    If you are doing this only for marketing reasons, I'd go the multiple-brand-in-one-company route. If it is for other reasons... Perhaps best to explore that only if it is a bridge you are going to cross.
    The trouble with opportunity is it normally comes dressed up as work.

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    Quote Originally Posted by Dave A View Post
    You could have seperate brands within the same single ownership.
    You could have multiple companies with a holding company tying them together.

    One thing I'll warn about now - managing multiple entities is quite a challenge. There are issues that crop up that you don't get in the single cell business entity.

    If you are doing this only for marketing reasons, I'd go the multiple-brand-in-one-company route. If it is for other reasons... Perhaps best to explore that only if it is a bridge you are going to cross.
    I guess you could say marketing reasons ... I want different sides to promote different products in their own individual way ... and I really don't want the burden of more companies.
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    There are accounting packages which make use of "Classes", as you enter the invoices, bills etc you enter the class.
    When running reports you can then select a specific class and the program will calculate a Profit & Loss statement or Sales Report etc. for a selected class.
    We do this to run "Seperate" books for each division of the company but within one accounting package.
    Our auditors audit one set of books, and produce one set of financials.

    If you might plan to sell one division of the company at a later stage this may not be the best solution for you.

    This suggestion is probably too simple for what you need, as I would this you could only trade under one "name" with one Vat Registration Number etc.

    Perhaps it is possible to register for Vat as one company name and then X Trading as ? - check with S.A.R.S.

    Yvonne

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    If you do not have risk to spread, stay away from multiple companies, I promise you it is hugely complicated to manage all of them. I currently have three CC's to manage and it is extremely time consuming to manage 3 bank accounts, 3 Debitors, 3 creditors, and books in general for all 3 the businesses. What makes it even more complicated is the fact that I have different members to each CC which means that I have to attend a lot of meetings and deal with many more issues.

    From a marketing perspective brands are much more powerful than business entities. IMO focus on branding it is a much better call.

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    Ok ... so we deduced that creating a business is not the best option. So what would be the best way to go about creating the names ... how do I trade as "X"? I'm guessing I can't just write "Business A trading as X"? Do I have to submit the names to an entity, or create trademarks or something?
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    Site Caretaker Dave A's Avatar
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    You can do the (legal entity) t/a My Brand1, Brand2 etc. But to protect your brand names, it is a good idea to register trade marks.

    Roelof, do you also find the problem of different entities trying to pull on the same resources at the same time? And then there is all this pressure on who has priority. That one drives me nuts.
    The trouble with opportunity is it normally comes dressed up as work.

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    Quote Originally Posted by Dave A View Post
    You can do the (legal entity) t/a My Brand1, Brand2 etc. But to protect your brand names, it is a good idea to register trade marks.
    Ok, lets say I wanted to sell frogs under Digital Addictions name and wanted a whole other website etc, and I want the website to be called Frog Addiction.

    Do I now have to write in the T&C on the website "Digital Addiction T/A Frog Addiction"? I'm assuming the logo can just be Frog Addiction provided that at the bottom of each page it says Digital Addiction T/A Frog Addiction ... or do I say Frog Addiction is a division of Digital Addiction CC?

    In terms of legal documents such as invoices, VAT number, etc ... I don't mind keeping everything as Digital Addiction CC. I think the financial cost of having to get separate invoices for each division, especially when there can be up to 20 is un-necessary, but perhaps I'm wrong.

    I use an accounting system called Fincon, so if you have any insight on divisions in Fincon, please do share.

    Regards

    Itai
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    Site Caretaker Dave A's Avatar
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    In that instance I'd recommend
    Quote Originally Posted by eitai2001 View Post
    Frog Addiction is a division of Digital Addiction CC?
    I've thought of one wrinkle in this.

    Imagine some official returns where you give your company and trading names. It would go

    XYZ cc t/a ABC, DEF, GHI etc.

    Could get quite long and maybe even raise some eyebrows!
    The trouble with opportunity is it normally comes dressed up as work.

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    So then what can I do ... because I sort of need the various trading names.
    If you need any Accounting, Tax or even Financial Management advice, PM me and I'll try help and keep your information confidential.

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