Welcome to The Forum SA. As a visitor you have read only access to the public content areas of this website. You will have to register as a member to access all content, post messages and network with our members. Membership is free and registering is quick and easy. You can click here to register now and become a member within minutes.
The truth is there will be a growing number of CC registrations within this year. And I thought it wise to ask from the “knowing public” what do you need to start a CC what and more importantly how to manage you’re VAT. So please all experts; Care to share?
peace is a state of mind Disclaimer: everything written by me can be considered as fictional.
Five names in order of preference, register online,at CIPRO(Companies Office), submit your CK 7, name reservation on line. Wait a day to 5, for approval, and use the approved name, to finalise the CK1(Founding Statements),obtain Accounting Officers consent/letter, and you should have a CC, within a day to 2.
Word of Caution, though. Much is made of the limited liability advantages of CC''s.(Not Liable for the CC's debts), but the "corporate veil" can easily be pierced if the CC, doe not conform to certain standards.
Sometimes , retaining a Sole Proprietor or partnership can be benificial. A sole proprietor can for instance, derive benefits from his business assessed tax losses. This is not the case with a CC. The two units are taxed seperately.
Sean Goss We all are scared, but only few are brave. www.sgafc.co.za
Sometimes , retaining a Sole Proprietor or partnership can be benificial. A sole proprietor can for instance, derive benefits from his business assessed tax losses. This is not the case with a CC. The two units are taxed seperately.
Interesting point. On the flip side, a CC can carry forward an assessed loss to offset against future profits - an individual can't.
Where (if there is one) is the dividing line where one is better than the other?
Interesting point. On the flip side, a CC can carry forward an assessed loss to offset against future profits - an individual can't.
Where (if there is one) is the dividing line where one is better than the other?
No, and individual CAN offset taxes against assessed losses, so can a CC.
Mr X trading as Z Enterprises(Sole Trader) can offset Z Enterprises Losses against his personal income. He however cannot offset CC losses against personal Salaries/income.
Its not a matter of what is better. Decisions to form CC's Ptys etc, are informed by size, owners and investments concerned, and off course, individual choices.
Sean Goss We all are scared, but only few are brave. www.sgafc.co.za
No, and individual CAN offset taxes against assessed losses,
But only in the same tax year, I thought. My understanding is you can't carry a loss into the next tax year and offset it there as an individual - as a CC you can.
Thanks this is looking good! Well now need to know now if you are just beginning and you want to do business with suppliers why then is a CC the only way to go?
or is it...
peace is a state of mind Disclaimer: everything written by me can be considered as fictional.
Hi, the reality is that CC's are being phased out - I am not even sure if one can register one at the moment (there have been mixed messages from DTI and CIPRO) - you can probably get your hands on one "off the shelf". Secondly most of the benefits of CC's are going to become irrelevant with the New Companies Act - members will pretty much be treated as directors, and the auditing/independent review parameters will benefit everyone in a small company (owner director scenario)... however there are some interesting twists in the New Act since it is pretty much changing the landscape of business in South Africa...
Now that is really interesting, however is just another way for government to keep dabs on the income of businesses or, perhaps allowing for more marketing opportunities. Also if you don’t mind me asking what changes will we see.
One more thing thanks for your post it is really good stuff.
peace is a state of mind Disclaimer: everything written by me can be considered as fictional.
Sometime this year new close corporations (CCs) will no longer be registered when the new Companies Act comes into effect.
The good news, however, is that existing CCs will not be scrapped but will have to adhere to both the new act and the current Close Corporations Act.
Associate partner in Shepstone & Wylie Attorneys, Claire McGee, says the new legislation will have a profound effect on the way business is done in South Africa, and in particular, on the future of close corporations (CC’s).
No new close corporations will be registered, and existing companies will not be permitted to convert to close corporations. The Companies and Intellectual Property Registration Office (CIPRO) will continue to process and implement any applications for incorporation or conversion which it has received, but not processed, by the date when the new Companies Act takes effect,” she says.
Ok... this will be an interesting development. However would it be possible to still trade with just a VAT number? Or will this system to be “killed” Secondly anybody know the date that was mentioned in the article?
peace is a state of mind Disclaimer: everything written by me can be considered as fictional.
However would it be possible to still trade with just a VAT number?
If you as an individual is registered as a VAT vendor, that'll continue. You'll continue to trade as a sole proprietor, blissfully unaffected by all the Companies Act changes. (Personally I think it's a bad idea to register for VAT as a sole proprietor, but perhaps that's another discussion).
As for the changes in the Companies Act, there are interim arrangements which ensure continuity when it comes to CC's. It's not like your legal entity is suddenly going to disappear - at least not for now. A CC has to have an accounting officer and I'm sure said accounting officer will guide the members of the CC through any required changes.
I'm also quietly wondering just how "profound" the effects are going to be. When it comes to "changing the way business is done" in South Africa, I'm inclined to think the Consumer Protection Act is going to be of far greater significance.
Absolutely agreed - the Consumer Protection Act is going to significantly challenge many businesses who play any part in the supply chain... I had an interesting meeting with the DTI yesterday with regards the Consumer Protection Act, their perspective was very interesting...
1. They are primarily going to be educating consumers - with little (apparent) interest and no (obvious) strategy on how to make companies aware of what their roles and responsibilities will be;
2. They are also "awaiting the changes" - in other words they are not all that proactive but are more focused on how they, as a department, need to change into the Consumer commission - representing consumers, than on how this will really affect business. Yet they are very clear on the timelines - April 2010 for the establishment of the Commission and (expected) publication of Regulations & Oct 2010 for full implementation of the Act...
3. The implication for business is that we need to prepare ourselves as soon as possible - a business could be involved in something right now (production/ manufacture/ procurement/ contracting) that could be subject to the Act once it comes into effect...
Where the New Companies Act fits in, and I believe that it is no less significant (but on another level), is where is places the responsibility and potential exposure - firmly on the shoulders on directors and officers in companies (anyone with significant general management, financial management, legal advisory and operation management)... and this would include members of close corporations, especially larger close corporation (that will effectively be treated like companies in many senses...
Still I cannot help but wonder about the cost. A CC was always a bit expensive because of the bookkeeping and administration. Still I do get the feeling that “Auditing” will become the norm with that notion I do think that overall administration costs will go up after implementation.
This being said I do think that small companies will once again suffer? Maybe, I can’t be sure because there is not a lot of Info in this topic right now so please any links will help.
peace is a state of mind Disclaimer: everything written by me can be considered as fictional.
Will post more on my thoughts about affect on smaller companies - some good some not so good/challenging... I think the most important thing right now is for EVERYONE with a business to better understand what the changes are and THINK through the best way for them to apply these to their business...
We process personal data about users of our site, through the use of cookies and other technologies, to deliver our services, personalize advertising, and to analyze site activity. We may share certain information about our users with our advertising and analytics partners. For additional details, refer to our Privacy Policy.
By clicking "I AGREE" below, you agree to our Privacy Policy and our personal data processing and cookie practices as described therein. You also acknowledge that this forum may be hosted outside your country and you consent to the collection, storage, and processing of your data in the country where this forum is hosted.
Tweet
Comment