Opening a new branch ?

[HR Solutions]

Looking for some advice please. We are in the process of actually starting a separate branch in Cape Town, although we have been operating in CT for some time. What is the best way to do this ? We are a PTY LTD trading as HR Solutions. We would like the branch to be separate from Jhb but still part of Jhb in the sense that the staff will still interact in all ways. We would obviously like to keep the books separate. What is the best way to go about this ? A few ideas that we have had is to have a holding company (the pty ltd) with HR Solutions JhB and HR Solutions CT. (The Pty is registered for everything including paye/uif/vat etc etc. Would this work ? ie legally in the sense that the branch manager down in CT will be getting share options/percentage ownership/profit sharing. Could the CT or Jhb branch invoice with the holding company's vat no etc etc. Could I still use pastel and create another branch ? Or would a franchise arrangement work better where my wife or myself is a "partner" in the CT franchise with this lady ?

Some advice would be appreciated.
Thank you

[wynn]

Watertight your compartments!

Open a second pty ltd for CT because if either hits the brown splashy stuff you need to keep the clean one smelling fresh

you can still do the books at one branch just under different numbers

[Dave A]

If you're aiming to have a different ownership holding in the CT branch, you probably should set it up as a company in its own rights. This could be as a subsidiary of your existing JHB company, or you could go the holding company route (and make the JHB company a subsidiary too).

Probably a good time to take a long view right now, and ask yourself some questions:
Are you going to open branches in other centres down the road?
Will there be separate shareholder deals on these other branches?
Would you want to do the same for your existing JHB branch one day?

Actually, on that last one, you could always form a new company for that and change your existing company into a holding company.
So maybe the subsidiary company structure is the answer?

I expect each trading company would need their own tax and employment related registrations though.

[HR Solutions]

Thank you for your input wynn / Dave

If we had to have a holding company with Jhb and CT being subsidiary companies/branches, could we have one vat no/paye no etc etc ?
Could someone have "shares" in the CT subsidiary ? Could we do the invoicing/books separate under the two subsidiary's ?

[Dave A]

Perhaps we'd better clean up some terminology to reduce the possibility of a misunderstanding:

"Branches" would imply one trading company.
"Subsidiaries" would imply multiple companies in a hierarchal ownership structure.

If we had to have a holding company with Jhb and CT being subsidiary companies, could we have one vat no/paye no etc etc ?

My understanding is each company would need, and operate under, their own registrations.

If they were all branches of a single company, then the company's registrations would apply to all branches.

[HR Solutions]

I think I seem to be heading towards branches (CT / Jhb) of a single company. But this is a new thing to us, therefore am looking for advise.
Can another person have shares in a branch (CT) and not have any legal right to the Jhb branch ?
Can one company's registrations (vat/paye/uif etc ) apply to all the branches ?
Thanks

[Dave A]

Can one company's registrations (vat/paye/uif etc ) apply to all the branches ?

No problem at all.

Can another person have shares in a branch (CT) and not have any legal right to the Jhb branch ?

If the branch isn't incorporated in its own right, how can it offer shares?
You could offer a profit share on just the branch, though.

[wynn]

You could offer a profit share on just the branch, though.

I agree with Dave A:- offer profit share to start with the option of buying in to the pty ltd later as a reward for making sure CT gets off the ground properly.

I seem to remember that the person moving to open the CT branch is an employee who you know and trust?

If you wish her to have shares straight away I would definitely open a new pty ltd because something in the rest of her life may result in your getting a partner you don't want or like and you certainly don't want that for your other branch or branches

[HR Solutions]

Thank you wynn. Yes quite right she is an employee. It does seem that the right way to go is to offer profit share first, then an option to buy at a later stage and then to open up a separate PTY.
We are also looking at a "franchise" way of going ?

Thank you for your help.

[HR Solutions]

i think Open a second pty ltd for CT because if either hits the brown splashy stuff you need to keep the clean one smelling fresh

Now WHY would you copy paste another posting from someone else (wynn) above posted ????