BusFact. Thank you for the informative response.
Seems like the right route to take is registering each entity, although it may be time consuming with all the documentation and administration.
So if I wanted to tender with government, I'd have to register each company seperately on the databases?
That sounds like a lot of hassle. How big is each of these companies? The simplest solution is still to just have one company. Why is it that you want to separate each company/section - the answer to this will indicate which solution is best for you.
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..?
Yes, that is correct. I am company secretary and I can help those who are struggling grapple with the anything related to CIPC.
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.Originally Posted by Bastion
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.
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?
[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 CIPC
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.
Thanks BusFact
I could think of a number of scenarios.
1.Say, in future, for example you want to offer shares from one your division, ABC Contractors which is a subsidiary of ABC Holdings offers share for partnership with someone with experience or vast knowledge and network in construction. But you don't want them to have any association with ABC Cleaners or ABC IT Solutions.
2. Protection of your other business, should there be a legal dispute
It's quite a lot of administration. If I decide to use just one company for everything, won't it affect records? Cause then it'll be like you forming a new company e.g. ABC Contractors, should I decide to only register that company independently when it's a large company
Thank you for this information, I also register a company but I am still deciding on a name, my aim is to have a holding company and later the subsidiaries trading under it. Thus from what I deduce from the discusion above is that I need to declare it with CIPRO?
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