Company Registration: Why do it?

Protect yourself

When you run a business, you are taking a risk. You will probably be loaning money from a bank or another institution to get you started. No-one lends money without expecting to get it back with interest. Now if your business fails and you can not pay the money back its very likely that the money lender will try to find ways of getting their money back. How he does this may vary depending on what you signed and what you promised to do. Now if you are not registered as a company, you would have loaned the money in your own name, and are subsequently more responsible for the debt. The lender then could try to get the court to force you to sell your house and other assets to pay back the debt. You will have no protection under the company act as you did not register a company. Now if you have completed Company Registration, and you loaned it in the name of your PTY, then there is more protection. The directors or shareholder could still be held responsible for the debt, however, but it does mean that the law sees the PTY as a legal entity, so their case is against a company, not against you. The fact that you registered your company could be a life saver.

Tax Benefits

No-one likes paying tax. If you are not registered you will have to pay personal tax on all your profits. Personal tax has brackets, which basically means the more you earn the more you pay. If you are successful then your business will very quickly start to pay over 30% of its profits to tax. However if you are registered as a PTY then you will be able to choose how to distribute the profits. You have a lot of options available to you, all of which will help you save money. Your accounting officer or tax consultant will be able to give you advice on how to save money.

Look Professional

There is no doubt about the fact, that a registered company looks like a proper company. Impression counts in business. You give a good impression, then you will probably get the job. A registration number also gives people an indication of how long you have been in business as the year of starting your company is found in the first four digits.

You can tender

A lot of business can be gained through tendering for it. But you can not tender unless you are a registered business. You can use the shares to raise money.

Company Registration: What is the process?

The first part of the job of Company Registration is filling in the appropriate online form on our website. The form is subdivided into five steps so if you are not certain about the validity of the information that you are filling in, you can stop and return to your Company Registration order at a later date under 'My Purchases' (which you will see after you have logged in)

After filling in the documents you will need to provide us with the extra documents that we will need before we can start your company registration. They can be summarised as "Power of Attorney","Copy of your ID's" and "Proof of payment"

The company registration process can be divided into two sections. These are the name registration section and the final registration. During the name registration your four name choices are compared against the national database for similar names. The reason for this is to prevent fraudulent companies, imitating each other, or competetive complications. If the first name is rejected then CIPC compares the second one, and this continues for all four. If all names are rejected then we are unable to continue with your registration. CIPC charges us for another four names, so I am afaid there is an extra charge if we send through more names. We will let you know if this is the case, and the charge then is R110. So it makes sense to watch all our videos about choosing the right name, so prevent complications in your company registration later. Also we provide a "Test Button" on the name capture page, which retrieves information of companies with a similar name to yours, which can save you the difficulty of having all your names rejected.

Once your name has been approved we send all your documents through to CIPC and wait for a reply. Sometimes the reply can take just a few days, but this is not always the case, so be prepared for a period of 3-4 weeks for completion of your Company Registration

Once your company is registered, the completed documents are emailed to us, and then we combine this with a 'post registration' digital document which will contain all the documents required by the bank, including your Share Certificates.

Once the share certificates have been signed by the directors then they are valid legally. Your Company Registration is then finished.

For your convenience we keep a copy of your company registration documents on our server under your login, so that you can retrieve them at any time, if perchance you have mislayed them.

Company Registration - What can go wrong?

There are two main areas where we can run into problems

Names are very important in Company Registration. In most cases many of our clients have already decided the name they must have and there are no other options. However the reality is that CIPC is very strict when it comes to names. If your names are rejected, during company registration, it can be quite devastating for you. Your 'dream' may have to change a little bit so that you can find a new name, and this creates delays, also you will need to provide proof of payment for the R110 for your new names and we arent able to proceed without these names.

The other thing that could go wrong is that your ID is not clear enough. CIPC likes to see your face clearly and if you send us bad copies or faxed copies then the image may descend into shades of black and white. We at Swiftreg try to warn you that it could be rejected and will request a better copy for company registration. This might take time for you to retrieve.

Franchises must have a signed, original letter from the owner of the name to register a company with that name. Failure for us to retrieve this from you will cause your name to be rejected which creates delays.

Id's are checked against Home Affairs

Owing to the fact that all ID's are checked against home affairs, married ladies, where there ID book does not reflect their new married name, may get rejected through the automated procedures. Such situations require a marriage certificate from this director and a manual process of submission, both of which take time, and delays the company registration procedure.

The same situation can occur if home affairs has some issue over your ID number, which is a database problem on their side and cannot be predicted. All of this can be solved through manual submission of your order to CIPC, but does create a delay

Delays from CIPC due to backlog
In the past the registrar has had some major problems. Sometimes just a re-arranging of the office can cause massive delays in the Name Application process, and in other times, whole batches just got lost and had to be resent. However at the time of writing a lot of these problems have been resolved. If we notice that during your registration procedure, so error occurs that prevents us from receiving the normal correspondence

Company Registration and your SHARES?

It is important for anyone who is about to register a company to recognise the difference between Directors and Shareholders.. A Director is a responsible individual, over the age of 18, who is legally held responsible for the effective running of the business. If they financially mishandle the business, whether in failing to pay tax, or outstanding debt, they could be held personally liable. Shareholders own the business. These are individuals who have probably invested in the business, and if the business was sold, would receive the percentage of the proceeds in accordance with the percentage of what they own. They are responsible to appoint and fire the directors of the company (in most cases). The rules and pattern of this arrangement is specified in a document used during the registration called the MOI.

During company registration the registrar is only interested in Directors. They do not keep any record of the Shareholding of your company

However we at SwiftReg would like to assist you with your Share Certificates and minutes to give you a head start, so we ask for all that information and send you properly laid out share certificates.

Choosing who is going to be your share holder, is a very important part of business. Shareholders do have authority. We at Swiftreg use "1200" shares, owing to the ease that it can be divided equally between share holders, as no half shares are allowed.

Important things to note about Company Registration

1. Document Processing Period

All documents completed by SwiftReg are sent to CIPC(Companies and Intellectual Property Commission) who processes them. The processing time varies significantly (3-8 weeks) and SwiftReg has no influence over the speed of this process therefore we are entirely at the mercy of CIPRO regarding all registrations. Please be aware that we have the same access to CIPC as the general public and in the event of delay we suggest that all your queries should be aimed at CIPC directly. Please contact the call center at CIPC (0861 843384) or check the following links for your documentation. This bulletin will show you the delay in the processing of documents submitted. SwiftReg's responsibility is to ensure that your application has been received by CIPRO. For this reason all our correspondence is hand couriered on a daily basis to CIPRO. Please note that the final documents are posted directly back to the new members and not to us. Should they be posted to SwiftReg, we will immediately post them to the Registered address.

2. Company Tax Numbers & Vat Registrations

All companies should register for tax. You are welcome to use our Tax Registration and Tax Clearance service at SwiftReg at an additional cost. Its impossible to register a company for VAT before the registration has been fully completed. VAT numbers are only given by SARS after you have been trading for a while or can provide adequate proof that your future business will have a certain level of turnover. .

3. Bank Accounts

Most Banks insist on the final original documents (Cor 14.3) to open accounts. Other checks could be to see if your directors are blackl-listed. If so then the bank may refuse to open the account until the debt has been paid. Please consult your bank directly to find out their requirements in this regard. We provide all company documents that the banks request to open an account. .