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Thread: cc/sole prop

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    cc/sole prop

    i have decided to only have one company to cut costs...ie accountant fees...bank charges...yearly registration...etc.

    i have sole prop bussiness which is registered with vat and a cc which is not registered with vat...the cc has staff registered but the sole prop has no employees registered.

    some help required...do i close the sole prop and deregister from vat...and stay away from vat? then move eveything over to the cc(which is 3 years old)

    or do i close the cc which is not vat registered and carry on operating the sole prop(almost 20 years old)

    i have noticed some of the bigger companies are saying if i am not vat registered they will not deal with me...surely they cannot enforce this...considering most of the work we do for big comapnies is is for labour only...you cannot claim vat on wages.

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    Site Caretaker Dave A's Avatar
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    If you registered for VAT many years ago you wouldn't have noticed, but registering for VAT nowadays is a pain.

    Let's run over your reason quickly - accounting fees on a sole proprietor should be next to nothing if you keep proper financials. And I doubt you'll save on banking fees by having one bank account instead of two if both are reasonably active.

    Now why would merging the two businesses into one save you money again?

    If you're going to bring the two operations together anyway, put it in the CC. It's good practice to have your business as a seperate legal entity from you personally.
    The trouble with opportunity is it normally comes dressed up as work.

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    Platinum Member sterne.law@gmail.com's Avatar
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    I go with a single entity in the form of the c.c. Having a cc gives more credibility when approaching financial institutions. Furthermore with a cc you can pay yourself a salary, to be taxed as an individual. This reduces the profit which reduces your tax bill in the cc. As a sole prop that income is taxed at what you are earning.

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    i am considering moving everything over from the sole prop to the cc...the cc is a proffessional testing service and the sole prop a contracting company both electrical related.

    then leaving the sole prop idle for now then using it for another bussiness which is starting to take shape manufacturing...but is completely different to what i will be doing in the cc...i purchase lots of materials for manufacturing the product so i can claim the vat back...bonus thing about the sole prop is i can just change the name without having to advertise trading as.

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    R600 per month (R8208 for a year) for accounting fees...does this sound reasonable for a small sole prop buss....i am still trying to figue out how they justify this considering it takes them 15minutes every 2 months to do the vat and i take my paperwork to them...i know this because i had to sit and go through it with the accountant...

    this is one of the reasons i kick myself for becoming and electrician...we risk our lives every day and this is no joke...try get life insurance if you are an electrician and see what red tape...risk profiles...etc required to get min. cover...yet we have the cheapest rates in any industry...we should be the most expensive service considering the risks...and dont forget we are on SA roads every day travelling to and from site...next time you have to pay the elctrician and decide you want to scr*ew him and complain about the bill think about it.

    while on the subject...something i found out the other day...you dont always die immediately from electricution

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    Site Caretaker Dave A's Avatar
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    What financial accounting package are you using?
    The trouble with opportunity is it normally comes dressed up as work.

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    Platinum Member Marq's Avatar
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    R600 per month (R8208 for a year) for accounting fees...does this sound reasonable for a small sole prop buss
    Sounds fine to me, but then I am biased. Accountants travel the same roads you do, pay for additional liability insurance, cpd and numerous other expenses just to stay registered and operational. If you are unhappy, then discuss it with your accountant. Most of them are agreeable people, there are only a few that are like me. Yes if you think you are being screwed over on your rates then put them up as well. My electrician seems to charge the same rates as my plumber, who also has some dubious tasks at times that I am sure would give any lab rat the heeby geebies and test his life and security skills.
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    Site Caretaker Dave A's Avatar
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    My angle on this is an accountant is going to charge in some sort of proportion to the work you put him/her too. If you're presenting books with all the data correctly captured and critical accounts reconciled, it costs you less than if you're dumping a box of expense slips on their desk every month.
    The trouble with opportunity is it normally comes dressed up as work.

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