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Pty (Ltd) Questions

Giovanni

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I've been doing business as a Sole Proprietor for a while now under two "divisions" let's call them XYZ Technology and ABC Media.

I make roughly the same amount from both endeavors monthly. I do not plan to grow ABC Media for longer than say the next 5 years as it is a time/skill-based job I don't see scaling very well, but it provides a good stable income for while I am trying to launch XYZ Technology to become my main focus.

Recently, however, ABC Media has gotten more and more corporate clients that require a registered business for it to become a preferred vendor. I've gotten around that with 2 of the corporates but lost the 3rd.

Since ABC Media is not my long term plan, I would like to:
Register XYZ Technology as a Pty (Ltd) and trade as ABC Media towards the clients I serve through that.

As far as I see this is legal, but some clarification would be appreciated from anyone with experience. The Consumer Protection Act 68 of 2008 (“CPA”) specified that in order to use Trading As names, the name needs to be registered as a "Defensive Name" in the name of the person who registered the company. However, I also see that this has not yet been implemented, and thus not necessary? I don't mind however, R250 every two years for the additional name is not a big one.

I'd like to know how I go forward with the banking though? I need both names to appear on the banking details that go out. (One bank account)

This is mainly from a branding perspective as the two endeavors have no intersection. Also, trading as both but registering one legal entity should help the monthly cash flow should one suffer a loss, and simplify the tax, etc.

Side unrelated question (which shows my lack of knowledge): How do I go about paying myself from the registered company? As a director of the company, do I need to register myself as an employee as well and pay a salary or...?

Has anyone done something similar willing to share their knowledge?
 

dash09

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If the company reg documents state "XYZ Technology Pty (Ltd) T/A ABC Media" then it shouldn't be an issue if the bank account name is just XYZ Technology Pty (Ltd), as long as the reg numbers match.
I think
 

Giovanni

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If the company reg documents state "XYZ Technology Pty (Ltd) T/A ABC Media" then it shouldn't be an issue if the bank account name is just XYZ Technology Pty (Ltd), as long as the reg numbers match.
I think
I don't see an option to register as "XYZ Technology Pty (Ltd) T/A ABC Media" on CIPC.

:sick:
 

dash09

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I don't see an option to register as "XYZ Technology Pty (Ltd) T/A ABC Media" on CIPC.

:sick:
Will pm you when I'm at my desk

Sent from my LYA-L09 using Tapatalk
 

Dentech IT

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If you want to register, You just register XYZ Technology, When trading, you can ad on your invoices t/a. You can run 10 Businesses under your Pty.
FYI, i wouldn't register, i went through the same thing. i ended up having to pay Tax for my Pty and my personal income. And on top of that VAT.
Sole Proprietors are the future of this country.
 

Thorian

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If you want to register, You just register XYZ Technology, When trading, you can ad on your invoices t/a. You can run 10 Businesses under your Pty.
FYI, i wouldn't register, i went through the same thing. i ended up having to pay Tax for my Pty and my personal income. And on top of that VAT.
Sole Proprietors are the future of this country.
This depends. Remember if you are high earning you pay up to 45% tax. But a company only pays 28%. So you can get a normal salary of 195 851 – 305 850 per year to stay below the 28% and after that say it's a loan between you and the company and that is interest free.
 

Thorian

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If the company reg documents state "XYZ Technology Pty (Ltd) T/A ABC Media" then it shouldn't be an issue if the bank account name is just XYZ Technology Pty (Ltd), as long as the reg numbers match.
I think
Agree with Dash. And also there is no option to register it like that on CIPC
 

Giovanni

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Ended up registering XYZ Technology Pty (Ltd), will be trading as ABC Media for that segment on marketing only.

Agree on the Tax thing -- but being able to service large corporates regularly, and the leads that generates, outweighs any tax implication.
 

thePridge

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This depends. Remember if you are high earning you pay up to 45% tax. But a company only pays 28%. So you can get a normal salary of 195 851 – 305 850 per year to stay below the 28% and after that say it's a loan between you and the company and that is interest free.
Just be careful... you cant just say it's a loan between you and the business just cause.
 

Thorian

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Just be careful... you cant just say it's a loan between you and the business just cause.
Oh you can't but you can (Well actually the accountants and auditors can) They set up a letter that is a template for all the clients saying you owe the business this much or the business owes you this much. It's included in the financial statements also. The world is dodge
 

thePridge

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Oh you can't but you can (Well actually the accountants and auditors can) They set up a letter that is a template for all the clients saying you owe the business this much or the business owes you this much. It's included in the financial statements also. The world is dodge
There has to be some sort of justification for it. I.e. "I performed functions in the business for X months without any remuneration" etc.
But I suppose you could lie and put together a fake justification for it.

I'm 100% for legitimate tax avoidance but lying like that is tax evasion...
 

Thorian

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There has to be some sort of justification for it. I.e. "I performed functions in the business for X months without any remuneration" etc.
But I suppose you could lie and put together a fake justification for it.

I'm 100% for legitimate tax avoidance but lying like that is tax evasion...
It is legal. Because there's a signed letter between the Member (Closed Corporation) or shareholder (Company) saying that the person loaned money from them or for them interest free. The problem is that sometimes it keeps increasing
 

PJtheKILL3R

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It is legal. Because there's a signed letter between the Member (Closed Corporation) or shareholder (Company) saying that the person loaned money from them or for them interest free. The problem is that sometimes it keeps increasing
I am not sure if this applies to companies as well, but I know low/no interest rate loans to/from trusts (which often is people giving themselves money like what you are advocating for) is not viewed favorably by SARS and below a certain rate (probably 7%) the interest savings is seen as a donation.

Also technically even if you have a loan to yourself with a decent interest rate, the interest portion that the lender receives will also fall subject to income tax.
 

Thorian

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I am not sure if this applies to companies as well, but I know low/no interest rate loans to/from trusts (which often is people giving themselves money like what you are advocating for) is not viewed favorably by SARS and below a certain rate (probably 7%) the interest savings is seen as a donation.

Also technically even if you have a loan to yourself with a decent interest rate, the interest portion that the lender receives will also fall subject to income tax.
You are correct
 

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