business ventures

[murdock]

i am not sure how to word this...

i have a few new bussiness venture i am busy trying to get off the ground...and need some advice.

if i already have 2 established companies...one being a proffesional/consulting service and the other a general contracting company.

how do i go about setting up the new ventures...which have nothing to do with the above companies...completelty different fields...both manufacturing...but completely different fields...both have different machines and are completely seperated in my workshop...if they take off i will be extending the workshop by another about 40 squares...so that i can move the noisy dusty machines out my main workshop.

do i register another 2 comapnies...open another 2 bank accounts?

the reason i ask is because i dont know what to do with the money if people want to deposit into a bank account.

if i one of the bussiness is a sole proprietor and vat registered...how does it affect my vat returns?

do i keep all the slips for the new ventures seperate or do i declare all the materials in the vat bussiness and get the deposits into that bank account and claim the vat?

or do i keep everything completley seperate and keep another set of books for each one of the new ventures?

so many other questions but lets leave it here for now.

[Justloadit]

Hi Murdock,

I would not waste my time right now opening new accounts and books. Run it all in your main account. If and when it becomes a successful business and venture, then register the company, and then register for VAT and SARS and open an account. If it does not work out, then so be it, you carry on as you are now.

[AndyD]

I agree, it's expensive to register them as separate business which will need separate accounts, separate books, insurance etc. I would just run it under the umbrella of your existing trading entity unless there's a very big reason not to.

[mother]

hey murdock! Yes, I would also just run it as is for now, no new accounts or registrations. But make sure your admin and bookkeeping is 100% up to date and accurate, because if and when something takes off, you will need to know exactly what and how much.

[wynn]

If you don't have a book keeper already (mornings only type lady) maybe now is the time to employ one (on contract) to keep the books for the seperate entities apart but under one umbrella.

you don't need to register a new company to do this just trade as Murdock cc t/a ZZ Manufacturing and t/a XX Distribution etc. until there is enough regular turnover to seperate the businesses.

Then you can consider a new Pty Ltd (Murdock Holdings) holding all the seperate companies (your existing and any new ones spawned more recently)

keep the seperation as is at one step until you can increase the seperation to two steps.

[murdock]

If you don't have a book keeper already (mornings only type lady) maybe now is the time to employ one (on contract) to keep the books for the seperate entities apart but under one umbrella.

you don't need to register a new company to do this just trade as Murdock cc t/a ZZ Manufacturing and t/a XX Distribution etc. until there is enough regular turnover to seperate the businesses.

Then you can consider a new Pty Ltd (Murdock Holdings) holding all the seperate companies (your existing and any new ones spawned more recently)

keep the seperation as is at one step until you can increase the seperation to two steps.

just to check that i understand this correctly...i have a registered cc which is not vat registered...and use it for consulting work...leave it as

consulting services cc

then have another part of the same registered cc T/A murdocks wood creations
and the other T/A murdocks ally creations...all under the same cc?

if the cc is not vat registered...i just need to keep a set of books for each division of the cc?

the reason for the seperate bank account is because the ally creations...purchases materials...i normally just do an eft once or twice a month depending on the orders...this operation has been going for a period of time already and has grown slowly...but this year i have an opitunity to turn it around and expand...due to demand...i have chosen to keep it small...mainly because of the headache of paper work.

[BusFact]

At the moment you only have one company, the cc. The T/A divisions are merely internal separations that you have created, they are not separate entities. When doing the tax returns for the cc you must include all the figures of the divisions together. You can separate your internal accounts into divisions if you wish, but that is entirely up to you.

If the cc becomes VAT registered then that implies all the divisions become VAT registered as they are part of the same entity. I can't imagine its possible to have one division registered for VAT and not another.

[Norri]

Just keep in mind folks that with the CPA, it's no longer legal to use t/a. If you've been doing it for over a year prior to the CPA, then you have 12 months to correct it. If less than that, then you were supposed to stop when the CPA came into effect (April 2011 I think).

At least, that was the case the last time I looked at this.

[Just Gone]

@ Norri ...... umm that is not what I have been told - i am also wanting to set up another business with a partner and have been told about the new laws of pty ltd etc, but have also got a memo to say that you can buy a shelf cc and convert it to a pty ltd within 10 years. If I do it in the next two years it is no charge. So effectively if I do buy a shelf cc I will be T/A !
So something does not make sense here - if you have 10 years to change then why can you not be a T/A ???

[Norri]

The point behind the "trading as" restriction of the CPA is so that consumers always know exactly who they're dealing with. Also, if you're a sole-prop, you need to use your real name and include your ID number, if you're a CC, you need your ACTUAL CC's name and registration number and so on.

Of course, if the business name that comes after "trading as" is an actual registered entity, and it's yours, you can use it.

Check out this PDF on the topic: https://www.saica.co.za/Portals/0/Te...o%20outlaw.pdf

[Dave A]

So something does not make sense here - if you have 10 years to change then why can you not be a T/A ???

That is because these are two different issues driven by two different pieces of legislation.

The status of the cc is governed by the new Companies Act of 2008 and the regs around that.

The t/a name reservation/registration issue is governed by the Consumer Protection Act.

[wynn]

just to check that i understand this correctly...i have a registered cc which is not vat registered...and use it for consulting work...leave it as

consulting services cc

then have another part of the same registered cc T/A murdocks wood creations
and the other T/A murdocks ally creations...all under the same cc?
(call it wood creation division and ally creation division to avoid the cc t/a story if it is a fact, clear it up first)
if the cc is not vat registered...i just need to keep a set of books for each division of the cc?
( you only have to be vat registered if your turnover is higher that a certain amount, register when you reach the threshold)
the reason for the seperate bank account is because the ally creations...purchases materials...i normally just do an eft once or twice a month depending on the orders...this operation has been going for a period of time already and has grown slowly...but this year i have an opitunity to turn it around and expand...due to demand...i have chosen to keep it small...mainly because of the headache of paper work.
(then the new pty ltd should be just about ready to be formed then?? a little extra paperwork is perhaps a good thing now??)

Maybe a visit to an accountant is in order.

[BusFact]

... but have also got a memo to say that you can buy a shelf cc and convert it to a pty ltd within 10 years. If I do it in the next two years it is no charge. So effectively if I do buy a shelf cc I will be T/A !
So something does not make sense here - if you have 10 years to change then why can you not be a T/A ???

Maybe I'm being slow this morning but I'm not following the logic.

You can convert the cc to a PTY in the future (not sure where the 10 year dead line comes from), but it keeps its same name. Only its title changes.

The limitation is only on the name of the business.

[BusFact]

The point behind the "trading as" restriction of the CPA is so that consumers always know exactly who they're dealing with. Also, if you're a sole-prop, you need to use your real name and include your ID number, if you're a CC, you need your ACTUAL CC's name and registration number and so on.

Of course, if the business name that comes after "trading as" is an actual registered entity, and it's yours, you can use it.

Check out this PDF on the topic: https://www.saica.co.za/Portals/0/Te...o%20outlaw.pdf

Thats a subtley different interpretation to previous ones I've had. I have always been under the impression that T/A names will continue, but they must now be registered with CIPC. The assumption was that there would be a separate registration process and fee for reserving a trading name that differed from the more complex resgistration of companies and trademarks.

However I suppose its a mute point as the CIPC don't seem to have any clear process for registering trading names anyway.

I'm also not sure where you find that you have 12 months to "correct it" if your trading name was in existence for over a year before this Act. My interpretation is that if this was the case you did not need to take any action and could continue to use this trading name. Its only the guys who hade been using the trading name for less than a year before the Act, that had to make a plan.

Oh well, as usual CIPC manages to sow confusion wherever its tentacles reach. I suppose it makes sense to simply create a company with a somewhat generic name so that it can be used to house various business operations. Keep it simple and only trade using your formal company name.

[Norri]

I've just read bits and pieces here and there. As always, with these things, each article has its own interpretation of the law. It's not until there's a precedent set that we really know what's okay and what's not.

I do believe your interpretation is correct though (ito the 12 months).