Results 1 to 2 of 2

Thread: Tax implications of changes in membership of a CC

  1. #1
    New Member
    Join Date
    Oct 2010
    cape town
    Thanked 0 Times in 0 Posts

    Question Tax implications of changes in membership of a CC


    I just need some clarity on the following scenario please:

    Three of us hastily formed a closed corporation a few months ago, in order to be able to import goods on very short notice (company or cc needed to get import licence). Due to the short timescales available, and the fact that we do not live close to each other, the cc only has one member at the moment (even though we contributed money equally).

    The business has since acquired stock and started selling. All we want to do now is rectify the members situation, i.e. split the 100% (R100) membership interest between the 3 of us.

    Am I right that we can just do the change, and since the amounts involved will not be based on the actual company value, but will just be R33 each, we do not have to worry about capital gains tax as such? This is only supposed to be an admin change anyway... Also, the business is not profitable yet.

    I would really appreciate some insight on this issue.

    Many thanks,

  2. #2
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Durban, South Africa
    Thanked 2,476 Times in 2,080 Posts
    Blog Entries
    Yep - if I understand you right you should be pretty safe. My understanding is you're just correcting the members record at CIPRO. From a financial point of view, the members have been partners right the way through.
    The trouble with opportunity is it normally comes dressed up as work.

    Alcocks Electrical Services | Alcocks Pest Control & Entomological Services

Similar Threads

  1. Replies: 3
    Last Post: 11-Dec-09, 03:12 PM
  2. Tax Advantages of Proper Asset Accounting for Small Businesses
    By sgafc in forum General Business Forum
    Replies: 14
    Last Post: 05-Nov-09, 07:07 PM
  3. P Gordhan: Taxation Laws Amendment Bills 2009
    By I Robot in forum Tax Forum
    Replies: 0
    Last Post: 01-Sep-09, 07:10 PM
  4. Flat tax rates for SA.
    By Dave A in forum General Business Forum
    Replies: 3
    Last Post: 13-Apr-07, 10:25 PM

Tags for this Thread

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