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A Shelf company, is a Close Corporation(CC) or Pty (Propriety Limited) company that has been pre-registered and waiting to be bought by a client in order to trade immediately.
Shelf Companies are inactive companies registered with the CIPC (Companies and Intellectual Property Commission) with no previous trading. They might not have Liabilities and they have a registration number. Some people also prefer to buy aged shelf companies. This basically means that the company has been registered for a few years and other Businesses, Banks and other Institutions are will to give Credit or have dealings with a company that has been existence for a few years.
Shelf company’s names are also similar but each one has a unique number and each shelf company has its own registration number.
The disadvantage of buying a shelf company is the fact that you do not have a unique name. You have to select a name off a list of pre-approved names. The Company’s status might be in “Deregistration Process” do to non-payment of Annual Returns which is payable to the CIPC (Companies and Intellectual Property Commission) to keep the company active. The name of the company would have to change to your preferred name and you would have to lodge a COR15.2 with the CIPC (Companies and Intellectual Property Commission) to change the name. The Business Registered Address would also need to be changed and that application is called a COR21 The Company’s ownership would need to change from the current Director and Shareholder to the new Director and Shareholder.
The Director Changes must also be lodged with the CIPC (Companies and Intellectual Property Commission) and that submission is called a COR39. Before the New Company’s Act came into effect on the 01 May 2011 all Shareholders information was stored with the CIPC (Companies and Intellectual Property Commission) but with the New Company’s Act, the Shareholders Information is not stored with the CIPC(Companies and Intellectual Property Commission) The onus is on the Directors to keep a Share Register. Sharevault offers a free online Share Register to store Share Transactions.
I would recommend using Sharevault to assist you in making changes to the Directorship and Share Transfer within your company.
A Shelf Company can be purchased if you are looking for a company that has been pre-registered and comes with a registration number to bypass the whole registration process. Business and Banks also prefer dealing with companies that have been registered for a few months. I would not recommend purchasing a shelf company as it is time-consuming and more expensive. Rather register a brand new company with your preferred name with the CIPC (Companies and Intellectual Property Commission)
There are companies that specialises in selling Shelf companies registered with the CIPC(Companies and Intellectual Property Commission) that can be purchased immediately if you are looking for a company that comes with a registration number.
Yes, if you want to submit for a quote or Tender for a project, the Customer or Company will only deal with a Registered Company. You may also need a Company with a certain registration, for example CIBD (Construction Register Services) VAT(Value Added Tax) NHBRC(The National Home Builders Registration Council) COID(Compensation for Occupational Injuries and Diseases Act) etc as you cannot wait for the whole process to be finalised when registering a New Incorporation with the CIPC(Companies and Intellectual Property Commission)
There are companies that offer the purchasing of VAT (Value Added Tax) Registered Shelf Companies. But SARS (South African Receiver of Revenue) calls to question the validity of the VAT numbers being offered to people who buy Shelf Companies. With a New Company registered with the CIPC (Companies and Intellectual Property Commission) and wanting a VAT (Value Added Tax) Number needs to go to the SARS (South African Receiver of Revenue) branch and complete a registration form.
The Director details must firstly be verified and a site visit needs to take place by SARS (South African Receiver of Revenue) before a VAT (Value Added Tax) Number can be allocated. The turn-around time is normally about 21 working days.
After the new Company’s Act came into effect, the CIPC (Companies and Intellectual Property Commission) in collaboration with SARS (South African Receiver of Revenue) registers all new companies for Tax.
In my opinion, it is expensive as you would need to change the Name of the company, Change the Registered Address, Change the Director and Shareholders information. You might not even be aware of any outstanding CIPC (Companies and Intellectual Property Commission)
The change of Directorship with the CIPC (Companies and Intellectual Property Commission) takes anything from two to four weeks depending on the CIPC’s (Companies and Intellectual Property Commission) speed and workflow. The Director changes can be done online on the CIPC’s (Companies and Intellectual Property Commission) website by lodging a COR39.
The CIPC (Companies and Intellectual Property Commission) then send back a digital document which must be signed by all the Directors. Newly appointed, Resigning and remaining Directors must sign the document, attached their Identity Documents, draw up the minutes and Resolution stating the changes and submit to the CIPC (Companies and Intellectual Property Commission)
> Registering a new company with the CIPC (Companies and Intellectual Property Commission) is quicker as appose to a buying a Shelf Company. The company is registered with your own approved name, we create new Share Certificates for the Shareholders through our digital system and it is registered with SARS (South African Receiver of Revenue)which means it has an Income Tax Number.
The company has a generic name. The Director change must be lodged with CIPC to and only after the changes has been affected, can you use the company. The Registered Address needs to be changed and you can only open a Bank Account after the company shows in your name.
People purchase many Shelf companies and use them as front companies to obtain Loans from Financial Institutions, Banks and Fraudulent activities. The companies then file for Liquidation and the bad debts are written off.
SARS(South African Receiver of Revenue) has introduced more stricter requirements for VAT(Value Added Tax) Registrations due to fraudulent VAT(Value Added Tax) Claims. People use to abuse this system as strict rules were not in place.
Most Government Departments and Suppliers prefer to deal with registered companies. The new Directors information must appear on the CIPC (Companies and Intellectual Property Commission) Incorporation documents. If you purchase a Shelf Company, the new Director’s information is not displayed. A director change must first be done reflecting the new Directors before any Institution or Government Department will deal with you.
When people buy the CIPC (Companies and Intellectual Property Commission) registered Shelf Companies, they do not lodge the Director and Address changes with the CIPC (Companies and Intellectual Property Commission) The Debt Collectors then knock on the Company who sold the Shelf Company’s door. The selling company often receive summons from the Sheriff of the Courts and harassing phone calls from Debt Collectors searching for the Directors/New Owners of the Shelf Companies.
They in turn have to explain to the Debt Collection Agencies and Courts that they registered the Shelf Company and sold it to Mr X but Mr X has not lodged the new Directors information with the CIPC(Companies and Intellectual Property Commission)
No, you do not receive a new Founding statement from the CIPC (Companies and Intellectual Property Commission) for a Close Corporation. When you purchase Shelf Close Corporation and lodge a CK2 to the CIPC (Companies and Intellectual Property Commission) to amend the membership, you receive an amended Founding Statement which is as CK2/CK2A which reflects the new membership.
If Shares were initially Authorised and Issued upon the purchasing of your Shelf Company, the Shares must now be transferred to you, the new Shareholder. If the Shelf Company was registered with 100 Shares and all the 100 shares were issued to the Shareholder that would be Share Certificate 1. If the 100 Shares must be transferred to you, you will receive Share Certificate number 2. If you wish to add three more shareholders to you Company, you would then need to transfer 25 shares to each of the three Shareholders.
Your second Shareholder will have Share Certificate number three. Your third Shareholder will have Share Certificate four and you will have Share Certificate number five. Share Certificate number two which you initially received will then be cancelled as you transferred 75 of your 100 Shares to the three new Shareholders.
The Director details would need to change by submitting a COR 39 to the CIPC(Companies and Intellectual Property Commission) by logging onto the CIPC(Companies and Intellectual Property Commission) You must create a profile to transact with the CIPC(Companies and Intellectual Property Commission) by choosing a username and password, pay any prescribed fees into the CIPC’s(Companies and Intellectual Property Commission) bank Account and they will add it to your user account and deduct any fees needed to do the changes. The Business Registered address would need to change to your Business Registered Address. The Shares would also need to be transferred to you, the new Shareholder.
When Close Corporations were initially registered by the CIPC(Companies and Intellectual Property Commission) it was a requirement for an Accounting Officer to be appointed on the Close Corporation. When you purchase a Shelf Close Corporation, you can appoint your own preferred Accounting Officer or Accountant to maintain your Close Corporation’s Books. The new Accounting Officer or Accountant can submit a CK2A (Change of Accounting Officer) to the CIPC (Companies and Intellectual Property Commission) to appoint them s the new Accounting Officers. The Accounting Officers must be a member of a recognized accounting profession and have a practice number.
The Close Corporation Act requires the Accounting Officers to determine if the Annual Financial Statements of the Close Corporation is in Agreement with the Accounting records. The Accounting Officers must then in turn report to the members of the Close Corporation regarding the Financial Statements.
No, since the Introduction of the New Companies Act in 2008, no more new Close Corporations are to be registered. Close Corporations that already exists can still trade but in time they would need to convert to a Pty.
Yes, all companies registered with the CIPC (Companies and Intellectual Property Commission) must submit Annual Returns to the CIPC (Companies and Intellectual Property Commission). If Annual Returns have not been submitted for a few years, the CIPC (Companies and Intellectual Property Commission) will deregister the company.
Changes to the MOI (Memorandum of Incorporation) submitted to the CIPC (Companies and Intellectual Property Commission) it called an amendment to the MOI(Memorandum of Incorporation)
> Upon the initial Registration with the CIPC (Companies and Intellectual Property Commission) the Incorporators and the initial Directors are appointed. When changes are made to the Directors of the company, the initial Incorporators names will still appear on the MOI (Memorandum of Incorporation) as they are the people or person who initially started the company.
The CIPC (Companies and Intellectual Property Commission) has simplified the amendment process where you can apply for the Director changes directly online on the CIPC(Companies and Intellectual Property Commission)
It is possible but not advisable. Many changes need to be done and this is expensive in the current economic status that we find ourselves in. You need to change the Directors, amend the addresses. You can change the financial year end and you need to transfer the shares.
You can either submit these changes yourself on the CIPC (Companies and Intellectual Property Commission) or if you are not familiar with the CIPC (Companies and Intellectual Property Commission)website, you can acquire the assistance of a reputable company to assist you with these changes. Swiftreg offers assistance to Client with changes to Shelf Companies that was purchased by other Companies to amend the Director and Shareholders information.