Guidelines to change aspects of your existing Close Corporation
Changing the name of a Close Corporation
- The CK7 allows for 1 to 6 options for a name. The more alternatives you provide, the better your chances to get a name approved quickly.
- The Registrar frowns upon the use of 'enterprises', 'unlimited', 'holding' (unless the entity will be a holding company) etc. There are exceptions to the rules, however.
- You should qualify your preferred name with something that describes your business e.g. Magnolia Carpet Cleaners if you are in the carpet cleaning business.
- Certain financial institutions no longer recognise 'trading as' names - i.e. John Smith CC trading as Magnolia Carpet Cleaners - please consult with yours before you apply for a name that will involve a 'trading as' scenario.
Amendments to the members of a Close Corporation
- Only natural persons.
- A minor, with a letter of consent from the guardian, duly lodged at the Registrar's office.
- A close corporation or a company cannot become a member of another close corporation, but a close corporation may become a shareholder in a company.
- A close corporation may have up to 10 qualified members
The maintenance of records for a Close Corporation
The members of a close corporation are entitled to do their own bookkeeping. Accurate records of the following need be kept in order to make it easier and more cost-effective for the accounting officer to verify the records and for taxation savings:
- All records of income, expenses, assets and liabilities.
- Invoices, deposit slips, cashbooks, ledgers, journals, asset register, stock records, cheque books, banks statements, loan accounts and the like.
The Public Officer
This is a person assigned by the Close Corporation who has the responsibility for receiving legal and tax documents for and on behalf of the Close Corporation. This may be a member of the Close Corporation e.g. the bookkeeper or any other person and is a requirement from the South African Revenue Services.
The Accounting Officer
Members are allowed to change the accounting officer at any time.
If the accounting officer resigns, the Close Corporation must then, within 28 days, appoint a new accounting officer. The members of the Close Corporation may be held jointly and severally liable for all debts of the Close Corporation if this position is vacant for a period of 6 months or longer.
An accounting officer is not allowed to perform the duties of an auditor. An accounting officer will examine the accounting records of the Close Corporation for the purpose of compiling the annual statements of the Close Corporation. The fee guidelines regarding the remuneration of the accounting officer as set out by the institution can normally be applied.
There are no rules and regulations regarding the use of a bookkeeper - any person, with or without qualifications, may be used to maintain accurate accounting records.
A letter from your accounting officer, agreeing to act as such for the new Close Corporation, must be mailed to us, together with the completed registration documents. Without this letter we cannot proceed to register your CC! This letter has to be original; the Registrar doesn't accept copies.
Your Accounting Officer must be 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 Accountants;
- 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.
If the turn-over of your Close Corporation exceeds R300,000.00 per year, or if the expectation exists that the turn-over will exceed this amount, the CC is required to apply for registration as a VAT vendor. The CC may also register for VAT if the turn-over is less than R300,000.00.
The VAT application is done only after the Close Corporation is registered and a bank account has been opened in the name of the CC.
We do not do VAT registrations for our clients. Please contact the South African Revenue Services.
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