Tweet
So in fact where does one find a holding company to buy in South Africa :?
-
-
Hi Everyone. Fortunately i found this post before i asked similar questions and started a whole new thread.
I am a new business owner and have decided to take the opportunity and start my own Tourism business doing day tours, lodge and airport transfers and also to start a tourist information center. I would ideally like to operate all of these as separate entities under one 'holding' company.
So..... Just to clarify from what i have read in this thread... The company that i want to use as the 'holding' company would be (for example) Batman Investments Pty (Ltd). This would be registered with CIPC and have 100 shares which would be split, in my case, 70/30. The subsidiary companies would be XYZ Day Tours, XYZ Transfers and XYZ Tourist Center. These would all need to be registered with CIPC as Pty (Ltd) companies and each would have 100 shares which would then immediately be bought out by Batman Investments Pty (Ltd), so that Batman Investments owns them each outright.
Am i on the right track so far?
If i am, then when it comes to VAT registration and taxes, would / could all three subsidiary companies be using the one VAT number that is registered to Batman Investments? Or, would each company HAVE to have its own VAT number? On the same note, if all three are using the same VAT number, then Batman Investments is paying the tax not each company individually?
Now, if they are all registered on CIPC as separate companies but owned by Batman Investments, they are then essentially stand alone enterprises and do not need to trade under 'Batman Investments Pty (Ltd) trading as XYZ Day Tours.' It could, in theory, just trade as 'XYZ Day Tours.'
I'm sorry if there is some repetition here, but i just want to try and fully understand this process as there is currently a lot of conflicting information on the internet and nothing, bar this thread, has actually helped me to understand it.
I am looking forward to hearing back from you all and getting some much needed clarification.Comment
-
Yes you are.
Multiple entities can never share a VAT or Tax number. A single entity with multiple branches could have multiple VAT numbers, but never the other way round.If i am, then when it comes to VAT registration and taxes, would / could all three subsidiary companies be using the one VAT number that is registered to Batman Investments? Or, would each company HAVE to have its own VAT number? On the same note, if all three are using the same VAT number, then Batman Investments is paying the tax not each company individually?
Spot on. Actually, they are obliged to trade for themselves; they may not trade under the holding company's name.Now, if they are all registered on CIPC as separate companies but owned by Batman Investments, they are then essentially stand alone enterprises and do not need to trade under 'Batman Investments Pty (Ltd) trading as XYZ Day Tours.' It could, in theory, just trade as 'XYZ Day Tours.'
A holding company scenario is simply one where you, the shareholder who would normally own the shares in a trading company, is replaced with a company in which you you own the shares, and it owns all or some of the shares in the subsidiary company. The subsidiaries can also own shares in each other and can in fact own some shares in the holding company.Comment
-
Thank you so much for your help with this! I really appreciate it a lot!Comment
-
People i have to bud in here ! I registered a pty ltd in June 2015...recently a family started a laundromat service and asked me to partner with him. This business is however not registered and i want to incorporate it into my pty ltd. Help please...Comment
-
Basically the current owner will sell the existing business to your pty ltd. You should write down the details of the sale agreement, and then also agree in writing what each of your responsibilities are and what you are entitled to each receive in terms of salary, profits and shares.Comment
-
BusFact
So does this mean i can register a company as a holding company and trading with the informal divisions and as they grow and gain their own independence, then i can register the individual division as subsidiaries..?Comment
-
Yes, that is correct. I am company secretary and I can help those who are struggling grapple with the anything related to CIPC.Comment
-
I'm maybe being a bit pedantic here, but for clarity, you don't register a "holding" company, you just register a normal company. It becomes known as a holding company if it eventually owns significant shares in other companies.
Otherwise your plan sounds just fine. When it comes to the separation, there may be a number of ways of doing it, some common ones would be:
1) You would register a new company which would then buy any assets from the original mother company, and start trading separately.
2) You would simply start trading in the new company and cease trading in the division of the mother company.
Keep in mind that this will most likely involve new tax numbers, vat numbers, bank accounts and co reg numbers. Invoices will need to be redesigned, supplier and customer credit accounts resigned etc.Comment
-
Hi guys, this thread was posted a long time ago but hopefully someone is still able to assist.
I would like to check if losses in one company can offset profits in another if both are 100% owned by a holding company?
Or does each company in the group have to submit tax returns separately and pay taxes as stand alone businesses?Comment
-
Hi
The individual companies are taxed, not the group.Comment
-
Hi everyone
I recently registered a private company as XYZ Group,just a normal company. Since someone mentioned that you can have divisions in just one company which is a cheaper option, I wanted to know if I can use different trading names and for each division which will serve as brand names and also include it in my invoices that I will be issuing to customers?
I know this thread started 7 years ago but I really need your help as it will cost me dearly to start from the scratch.Comment
-
Hi
Divisions are a quite different to trading names. A company can be comprised of multiple divisions but any communication with other entities must not seek to obscure the relationship.
Normally any documentation will state the registered entity details and then also state the division being dealt with.
Some companies give emphasis to the division, others give emphasis to the company. In your case you probably would want to give emphasis to the division.
A simple example is an invoice boldly headed "Widget" and in the next line, not as bold, "A division of XYZ Group (Pty) Ltd"
In a nutshell, documentation must explain the relationship, not hide it or misrepresent it.
Also, it is probably worth mentioning that in addition to its income, each division normally has it's own expenses, assets and liabilities.Comment
-
[QUOTE=BusFact;124085]There are different ways of doing this:
2) Register each of the sections as a company. ABC Holdings will then be the total or part shareholder in all of the others (subsidiaries). This is more expensive and more admin, but allows for different owners in each section and partly protects the rest of the companies if one fails.
How exactly is this done at CIPC? When registering the subsidiaries how exactly do they then become part of the holding company? I have opened a Holding company but I am not sure how to go about linking the subsidiaries with the Holding company at the CIPCComment
-
In a nutshell you don't. A company is a holding company simply because it controls another company, usually by means of its shareholding. It could sell it's shares tomorrow and cease being a holding company because it no longer owns shares in a subsidiary.
So in the example you mention, your holding company owns all or a controlling interest in the subsidiary. You now need to prepare individual financial statements for each company as well as consolidated financial statements for the group.Comment
Comment