| How a Closed Corporation is
set up for you
» A Private Company VS a Closed
Corporation
» How a Closed
Corporation is set up for you
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| Step 1 |
| The first
thing to do is decide on a name for your
close corporation.
We will need five names, in order of
preference. Your first choice may be
declined if it is too similar to an existing
CC name. The same can happen with your
second choice, etc.
Names, surnames and words
that you may find in a dictionary are
unlikely to be accepted. Generally, you will
have to make up a name. So, for example, you
may not register a CC called "Electrician".
However, you could apply to have "Spark
Electricians CC"; unless there is already a
CIPRO registration such as "Spark
Electricians Pretoria CC", in which case
your second choice of "New World
Electricians CC" will be considered.
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| Step 2 |
Reserve the
proposed CC name.
For this, you need to complete the “Register
new cc” application form on our site. We
will then reserve this name for you. This
usually takes between 1-5 days. |
| Step 3 |
Appoint an
Accounting Officer. (If you don't have one,
we will automatically appoint our own
qualified accounting officer on your behalf
at no extra charge!), or, if you have the
right qualification and you've decided to do
the books yourself, you can accept the role.
(but it's generally a good idea to outsource
this function as soon as possible so that
you can spend your time on doing real
business.)
He or she must provide you with a letter of
acceptance to this post. This letter is
provided free of charge if you use our
designated accounting officer. The
accounting letter should also include the
address and contact details of the
accountant. The accounting officer must be a
member in good standing of one of the
professional accounting institutes.
Alternatively you can look in the Yellow
Pages to find an accounting officer
operating in your area, or enquire from
businesses near you.
Generally, you should not appoint a
qualified or registered auditor or chartered
accountant - they are much more expensive
and normally deal with companies. |
| Step 4 |
| Sebenza
Business Solutions will e-mail/post the CK7
to you with your new approved business name.
We will then complete the CK1
(Founding Statement) document on your
behalf. This Founding Statement contains
details about the corporation, its members
and their respective investments (percentage
membership and financial contribution) in
the CC.
|
| Step 5 |
A CC may only
commence doing business once CIPRO has
issued a certificate of its incorporation
CK1. And as soon as Sebenza Business
Solutions receives your certificate we will
e-mail you a copy so you can start trading
under your CC name.
This does not mean that you cannot start
doing business as a sole trader before
registering a CC. It simply means that you
may not do business IN THE NAME OF THE CC
until the issue of the certificate of
incorporation. |
| Step 6 |
The CC must
designate someone as the corporation's
Public Officer.
The main responsibility of the Public
Officer is to submit the annual tax return.
The Public Officer need not be a member of
the CC. It could be the Accounting Officer,
for example. |
| Step 7 |
Members
of the CC would be wise to draw up an
Association Agreement setting out the rules
for the relationships between them and also
between the members and the CC itself.
A standard model Association Agreement may
be found in the Close Corporations Act, but
members may amend it at any time. Usually,
the Agreement addresses:
- A members'
participation in the CC, rights of
management and the power to represent
the CC
- How differences
between members may be resolved
- Members' voting
rights (which should correspond with
their respective member interest or
ownership percentage)
- Payments to members
(usually in proportion to their
respective interests, again)
- Payment of managers;
and
- The use of the CC's
assets and money by members.
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| Finally: (Optional) |
It is also
advisable that the members (where there are
more than one) negotiate a so-called
Buy-and-Sell Agreement. This is an agreement
in terms of which the members undertake to
buy out each other's members interest
(share) in the CC when one of them dies.
A life-insurance policy is usually
considered the best method of financing such
a transaction.
Duties of an Accounting Officer
The Close Corporation Act requires that
every CC must appoint an accounting officer
together with your first CC registration. If
you do not have an accounting officer, we
will appoint ourselves as your accounting
officer in order to speed up the
registration process. You can at any time
change the accounting officer, or you may
choose to stay with the officer assigned to
you. Our Accounting officer is : Mr. J. J.
Grobler - Professional Accountant (SA),
N.DIP ACC, Cert Fraud Exam, DIP Insol (AIPSA)
of Hiepgro Accountants Inc |
In general, all your accounting needs will be
comfortably and professionally met by Mr J. J.
Grobler.
Some facts include:
If a vacancy occurs, then the CC must appoint
another accounting officer within 28 days to replace
the previous accounting officer. If this position is
vacant for a period of 6 months or longer, then the
members of the CC will be jointly liable for all
debts of the CC.
The duties of an accounting officer are set out in
the Act. The accounting officer will scrutinize the
accounting records of the CC for compiling the
annual statements, on behalf of the members of the
CC.
There are no set requirements regarding the
remuneration of your accounting officer, you may use
any bookkeeper, qualified or not to maintain
accurate accounting records.
Note that an accounting officer cannot perform the
duties of an auditor.
Accounting Officer Qualifications
An Accounting Officer is a member of one or
more of the following professional bodies:
Accountants and Auditors registered in terms of the
provision of the public Accountants' and Auditors'
Act 51 of 1951;
- Member of the Institute of Commercial and
Financial Accountants of South Africa;
- Member of the Institute of Administration
and Commerce of South Africa;
- Member of the South African Institute of
Business Accountants;
- Member of the South African Institute of
Chartered Accountant;
- Member of the South African Institute of
Chartered Secretaries and Administrators;
- Member of the Chartered Association of
Certified Accountants;
- Member of the Chartered Institute of
Management Accounts.
What is a Public Officer?
Every CC needs to nominate a designated
person to be responsible for receiving legal and tax
documents on behalf of the business. A Member of the
CC is normally appointed as the Public Officer or
this can be any other person. This is normally your
accounting officer or bookkeeper.
We will appoint the first member of your CC as your
Public Officer if you have not indicated for any
other person to be appointed. The cost for this is
included in your registration fee.
How do we justify our prices?
Easily. Quality matters to us. You can rest
assured that your business registration is in safe
hands. All your registrations are treated as urgent.
You will notice that our products are priced to suit
every pocket, while delivering quick, professional
and courteous service at the same time. Our fees are
calculated once-off and are not calculated on a “per
member” basis –yes, this does happen! Read the fine
print on the some “cheaper” registration places,
where you end up paying more in the end. What you
see is what you get, there are no hidden costs. We
do not charge any “P.O. Box or counter-to-counter
delivery costs” or any fees for your accounting
officer letter (worth R200).
If you are going into business, why not do things
correctly from day one? It will save you time and
money in the future
When should I register for VAT?
It is only compulsory to register for VAT if the
turnover of your business is R1 000 000 or more, in
any 12-month period.
You can voluntary register your business if you make
a minimum turnover of R20 000 per year. The VAT
application can only be done after the CC has been
registered and you have opened a bank account.
A Tax Invoice must have the following information:
- The words 'TAX INVOICE' must shown.
- Date of tax invoice and invoice number.
- Name and address of your client.
- The person supplying the tax invoice, the
name of the CC, address and VAT registration
number.
- The VAT amount shown separately at 14% or 0%
(VAT exempt)
Your payment must reach SARS on or before the due
date, every 2 months.
VAT Registration can be done by our offices, we will
automatically forwarded the application forms to you
after your CC has been registered.
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