Selling my 100% in a CC

[eitai2001]

I will also on my own perogitive send out an email to all suppliers with the special resolution stating I have sold the members interest in the company to another person and am no longer involved with the company.

I'd like to see them take me to court when they are all fully aware I am no longer the owner. I will send them all a copy of the sales agreement, and tell them to be aware of clause x.x which states the information regarding the indemnity or suretyship, and also the number on which they can use to contact them.

[daveob]

I will be able to have a successful counter claim against them, and can tie up their assets.

Problem is that if this situation arises, you will probably be sitting with enough assets and cash / value for the supplier to attack / attach, whereas the new owner probably doesn't - indicated by the fact that he defaulted in the first place.

So you might find your supplier gets paid ( by you ) and your counter claim, even if successful ( and legal costs aside ) may result in you getting 100% of what the new owner has at the time - nothing.

Again, just my opinion, but I would seek some serious legal advice first.

[daveob]

I'd like to see them take me to court when they are all fully aware I am no longer the owner.

and that's EXACTLY what they will do. They ( and the law ) don't care if you are or aren't the current owner. Nor do they care at all if you ever were the owner. All they care about is the surity document in black and white. You "Mr J. Soap" signed surity for ABC cc registration number xxxx for it's debts to the supplier. That surity remain in force, irrelevant of whatever else you e-mail or send them, until they release you from that surity in writing.

Same as if you signed surity for your buddy in the pub to buy a car. You're not related to him. You don't even know where he lives. But if he defaults, you'll be paying the bill.

[daveob]

after thought .. by now, I think we'll have to agree that there is a potentially very dangerous pitfall here. Without the proper legal guidance, we could bounce possibilities forwards and backwards for weeks.

Bottom line is that you have had a potential problem pointed out - now you need to get professional advice about this and make sure that all bases are covered before you proceed.

Sorry if it sounds like I'm giving you a hard time about this, but honestly, I really don't want to see anyone paying for someone elses mistakes, or getting well and truly Hidley'd.

[Dave A]

I don't imagine that any other agreement that you, as the signature on the surety, has with a third party, would have any influence on the surety you signed for me ( unless I had previously accepted the transfer ). How would the supplier be able to verify the credit worthiness of the new owner without being made aware of the fact ?

Well there's the key right there.

What you need really is a release from suretyship from each of the suppliers at which you are a surety for the cc. I'd suggest getting the same from the bank too. And then keep them somewhere really safe.

Obviously the goal is to ensure as smooth a transition as possible, which gives a perfectly valid reason for you to be active in the process; going to each of the creditors, introducing the new owner, making sure any necessary amendments are made to the contracts of the cc, and getting your signed release!

[AndyD]

....or getting well and truly Hidley'd.

Higleyed or Higley'd, past tense of higley,

Pronounciation; hig-leed

Synonyms

* robbed
* conned

Verb

Infinitive
to higley


Third person singular
higleys


Simple past
higleyed


Past participle
higleyed


Present participle
higlying

Definitions

1. (transitive, slang) To trick or defraud, usually for personal gain.(often over the internet but not necessarily).

[eitai2001]

I don't have the time to go to the suppliers and fill in forms ... I'm busy with honours. However, I will ensure I get a copy of every new application that they fill in and send to the suppliers signing surety ... in any case ... I think I only have credit with about 6 suppliers and the bank ... for the rest of them, they need to pay COD or fill in a new app for credit.

I spoke to a lawyer already though, and she said the contract covers me. In terms of my assets ... I do not own anything besides a computer and a playstation and a bed :P ... the car is my mom's and I still live at home, everything else belongs to by mom's boyfriend who isn't related to me.

To be honest, not sure why everyone gave me credit in the first place, especially the bank ... I never signed over any security ... except a life insurance thing.

I heed and thank you for your warnings ... I'm pretty sure I've got it covered ... but I will fax each accounting department a letter of resignation as a shareholder in a CC, and perhaps a request for a letter to be released as surer to be faxed back to me.

I will make sure I get copies of all new contracts signed by the new owner.

Regards

Itai

[daveob]

Higleyed or Higley'd, past tense of higley,

Pronounciation; hig-leed

Synonyms

* robbed
* conned

Good going Andy. I see we've moved from the denial stage where we all wished for a positive and 'happily ever after' ending, to complete acceptance. Forum Therapy working again !!

[AndyD]

[wynn]

I am not sure of the tax implication advantages when you sell under the conditions you describe?
I would rather reccommend that you get the buyer to register his own vehicle and sell it to him.
The reason I say this is you have probably forgotten what and where (Banks most likely) you have signed surety, there is no more sobering jolt than finding out five years later that the sherrif is looking for you for debt incurred by the buyer of your cc.

[eitai2001]

I am not sure of the tax implication advantages when you sell under the conditions you describe?
I would rather reccommend that you get the buyer to register his own vehicle and sell it to him.
The reason I say this is you have probably forgotten what and where (Banks most likely) you have signed surety, there is no more sobering jolt than finding out five years later that the sherrif is looking for you for debt incurred by the buyer of your cc.

It will complicate things to get him to register his own CC ... a lot! Firstly, he can't use the same businessname cause the CC is registered in the name. Secondly, on the online shop world, age is trust ... if he registers a new company, he will lost a lot of trust.
Thirdly, there will be a lot of issues revolving around all the merchant accounts I have to receive money, not to mention the hosting, etc, etc.

In any case, I have not forgotten where I have signed surety ... I have only signed surety with the suppliers, the 1 bank account (I only have 1 bank account) and I think Vodacom for the contract. No where else.

And in terms of the suppliers, most of them are of a COD basis ... the ones with credit I will make sure they fill in new contracts ... in any case, its part of the suppliers T & C that if a shareholding change takes place with a CC, new forms must be filled in.

[Dave A]

I am not sure of the tax implication advantages when you sell under the conditions you describe?

One of the interesting parts of this deal is the assessed tax loss is actually an asset of the cc which might have affected the sales price. Knowing that the first x of your profits will be tax free is certainly a sweetener.

[eitai2001]

Hi. I have another question relating the sale ...

When submitting the CK2 Form, what is the best way to do this, and the way that will yiel the quickest CK2 receipt from Cipro? I have the ability to submit online, but is this best? The reason I ask is when I sell the company, I need to remove myself as a signatory at the bank and make the new owner a signatory, and the bank says they need a CK2 ... which I hear can take up to 6 weeks. So now what do we do ... how is the new owner expected to conduct business with continuity if he cannot access the banking initially when he takes over ... or is there an exception you know of the the bank didn't tell me that will allow us to change over?

[Dave A]

You could always go into the CIPRO offices (I'm sure they're in Pretoria) and get it done on the turn, seeing as you're in JHB.

[eitai2001]

You could always go into the CIPRO offices (I'm sure they're in Pretoria) and get it done on the turn, seeing as you're in JHB.

Is that possible? Won't they just tell me come back in x days?