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Thread: Starting a HOLDINGS Company

  1. #21
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    Basically the current owner will sell the existing business to your pty ltd. You should write down the details of the sale agreement, and then also agree in writing what each of your responsibilities are and what you are entitled to each receive in terms of salary, profits and shares.

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    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..?

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    Yes, that is correct. I am company secretary and I can help those who are struggling grapple with the anything related to CIPC.

  4. #24
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    Quote Originally Posted by Bastion View Post
    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..?
    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.

    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.

  5. #25
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    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?

  6. #26
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    Hi

    The individual companies are taxed, not the group.

  7. #27
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    Hi everyone

    I recently registered a private company as XYZ Group,just a normal company. Since someone mentioned that you can have divisions in just one company which is a cheaper option, I wanted to know if I can use different trading names and for each division which will serve as brand names and also include it in my invoices that I will be issuing to customers?

    I know this thread started 7 years ago but I really need your help as it will cost me dearly to start from the scratch.

  8. #28
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    Hi

    Divisions are a quite different to trading names. A company can be comprised of multiple divisions but any communication with other entities must not seek to obscure the relationship.

    Normally any documentation will state the registered entity details and then also state the division being dealt with.

    Some companies give emphasis to the division, others give emphasis to the company. In your case you probably would want to give emphasis to the division.

    A simple example is an invoice boldly headed "Widget" and in the next line, not as bold, "A division of XYZ Group (Pty) Ltd"

    In a nutshell, documentation must explain the relationship, not hide it or misrepresent it.

    Also, it is probably worth mentioning that in addition to its income, each division normally has it's own expenses, assets and liabilities.

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