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Thread: How Do I Get A Bank Account With New Pty Ltd?

  1. #11
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    That problem has always been around and it is exactly what gave birth to close corporations, it was largely modeled on what was being done in the UK. The new Act again has borrowed much from the UK.

    The thing I was trying to point out is that the Act is what we have, and in terms of the Act they cannot do that, even if we wanted them to.

    A while ago a client attempted to open a bank account at FNB and they wanted me, as the incorporator, to also sign. No amount of explanation would sway them. The client then went to SB in the same city and had no problem.

    The next client that went to FNB; I accompanied them, mindful of the previous incident, but this branch of FNB had no such qualms.

    What I am trying to say is yes there is a problem; it's the banks.

  2. #12
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    Since the banks are a real issue. The very least that CIPC can do is put a template on their website enabling people to generate these certificates. Whilst there may be 1000's of templates on the net, you have to know that you have to do one in the first place. But this whole thing has opened up a marketing opportunity for us and we have added this service to our website aimed at getting the clients business in totality. We have also compiled a document on the duties of a director. So for me the conversation had value. Thank you.

  3. #13
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    The fact that the shareholding in a private company is unregulated and mostly not audited, may lead to unscrupulous individuals abusing the shareholding by simply destroying the existing share register + the certificates and replacing it with a different set. This could lead to fronting or property “sales” not being recorded in the Deeds office. I would value your comments on these matters.

  4. #14
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    Hi Swiftreg
    1. Shareholding is a critical audit area, so if a company is required to be audited or independently reviewed, then the share register and any transfers is most definitely audited. By saying "unregulated" I mean it is not regulated by CIPRO per se, but it is regulated by the Act. For example, the whole issue of review and audit of non-owner managed companies is exactly to, in the first instance, protect minority shareholders. There are other "fundamental" transactions that are very much regulated, and those regulations are there to protect shareholders.

    2. A share transfer may not be given effect to if the original share certificate is not presented and cancelled.

    3. A shareholder who believes he has been defrauded of his shareholding, can rely on his share certificate to prove his claim.

    4. The share register and register of transfers may be inspected by a shareholder at any time.

    I am not aware of any comprehensive fraud ever being perpetrated as you sketch, but people are as people are, so doubtless it will have been tried. It is after all no different to having fraudulent books of account. But, we have all heard of hijacked directorships, yet not shareholdings; there must be a lesson somewhere there. There would need to be extensive collusion between the Board and other shareholders.

    Remember too that only the directors or appointed secretaries may administer shares and registers, and they are primarily appointed by shareholders. Simply put, don't appoint a rogue.

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  6. #15
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    Clive, how many shares do you allocate when you register new PTY's? What factors do you take into consideration?

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