Important notice: SwiftReg no longer provides the service of Shelf Companies, owing to the difficulty in doing amendments and other complications associated with them.
We recommend that you register a company directly as this is fast, has no complexities and is low cost.
What is a Shelf Company?
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.
Does SwiftReg sell shelf companies?
No, we have stopped selling shelf companies. This is because of the complications associated with them. It is often hard to make the changes in a timely manner as CIPC has made amendments more difficult in recent years. Also if we sell the companies without ammendments and the directors are not changed after a few months, its hard to know what to do with the situation.
What are the advantages of buying an off the Shelf Company?
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.
What are the disadvantages of buying a off the Shelf Company?
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.
What is the purpose of a Shelf 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)
How quickly can I get a Shelf Company?
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.
Is it possible to tender with my Shelf Company?
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)
Is a Shelf Company Registered for VAT?
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.
Is a Shelf company registered for Tax?
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.
Is as Shelf Company expensive?
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)
How long does a shelf company take to be registered in my name?
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)
Why does Swiftreg choose not to register Shelf Companies?
> 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.
What problems are associated with Shelf Companies?
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.
Fraud and Shelf Companies
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 Abuse and Shelf Companies
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.
Why Government Departments dislike dealing with Shelf Companies
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.
How Debt Collectors misunderstand Shelf Companies
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)