zombie, Author at Harbour & Associates

For how many generations do you want to be remembered? Do you want to be like the guy on the left, or the guy on the right? They both built the same wealth up until they died. The guy on the left owned it in his own name and SARS took about a third of it when his spouse died. There wasn’t enough left to generate the passive income that he had promised his kids, so the…

We form and sell shelf companies, so I guess that it is not surprising that we occasionally get a call from someone who wants to sell their dormant company to us. The answer is always “No”. Why? Because we do not know for certain that the company was always dormant. It could have some nasty skeletons in the cupboard. Sure, we can check on its tax and CIPC status, but that’s about all. Companies are often asked to sign surety against a dept of the shareholder and that is the scarey one because it would be impossible to trace.

I have always held that a Non Government Organisation (NGO) is simply an organisation which is governed by a Constitution as opposed to a Non Profit Company (NPC) which is governed by a Memorandum of Incorporation. I would state categorically, that a NPC is registered at CIPC, but that an NGO is not registered. They can both, however, register as a Non Profit Organisation (NPO) with the Department of Social Development. We own Gallagher Combined School NPC and it is registered as a NPO, so I was speaking with some experience. Then along came a client…

I guess that you are familiar with the Estate Duty allowance of R3,5m? If you bequeath everything to your spouse, then his/her allowance becomes R3,5m multiplied by two. That is R7m. But what happens to the allowance if he/she subsequently marries, bequeaths everything to his/her new spouse and then dies? Is it now R3,5m x 3? The answer lies in s4A(2) of the Estate Duty Act – s4A(2) Estate Duty Act (2) Where a person was the spouse at the time of death of one or more previously…

This is a bit like asking the cost of a Rolls Royce – if you have to ask, you can’t afford it! But it’s not quite like that. The problem is that if you are too price conscious, you can end up forming a seriously flawed trust and when you later come to us to fix it, our fees will be higher than our fees to form a solid trust in the first place. On Google, we’ve seen “From R499”, click on that and it’s now “From R799”, but then it tells you that is for the trust deed only.

I guess we all want to leave a decent legacy. It’s probably the only thing that we will be remembered for in a few generations’ time. D’you remember your grandparents? Sure you do. But what do you know of their parents? And their parents’ parents? Of course, you will not be aware of those people who have left a legacy to their descendants, because that’s a different family, but I’m sure you’ve heard of a guy called Nobel? He invented dynamite and left a legacy that…

There are a number of reasons for buying a shelf company that is already VAT registered. 1) SARS makes it extremely difficult to register a company for VAT. Only professionals like ourselves find it relatively straightforward, but even so, a lot of paperwork has to be provided by the client. 2) If you are buying a commercial property, you simply must be registered for VAT in order to buy it as a going concern and have the transaction zero rated. Otherwise, you will have to pay the VAT and then claim it back and wait, and wait ……. for your…

There’s no doubt that load shedding is with us for the foreseeable future, so no doubt you have ensured that you have back up electricity so that you can keep your company running, but have you thought about the knock-on effects? Having recently experienced them to a small extent I have taken precautions for the future. 1) If there is no electricity, the pumps cannot refill the water reservoirs, so if the situation gets worse, expect to have water shortages as we are already experiencing in Midrand. We have installed a Jojo on the roof and piped it so that…

Company registration can take anything from about 5 days to about 5 weeks depending upon the type of company and the ability of the client to provide all of the necessary information and signatures. By far the simplest and quickest is a (Pty) Ltd. This is the one that normally takes about 5 days. If you are going this route, don’t reserve the name yourself. If you do, you’ll add a week or two to the process. Any other type of company can take 5 weeks or so, sometimes considerably longer. Here are some of the things that will slow…

It was once fashionable to hold property in a company, so that when you wanted to sell it, you sold the shares only and the purchaser avoided Transfer Duty, so you got a better price. That led to a structure like this. This assumes that the properties cost R10m and are worth R40m when you die. The company must have borrowed the R10m to buy the properties, so it is worth the gain in the properties’ value. Despite changes to the legislation relating…

You’ve got no money left. The bank won’t lend you any more. There are no orders coming in. You can’t pay your staff. Do you want to give up, or do you want to fight back? 1) You are not alone. I wouldn’t be writing this if you were.

SARS are already hitting dormant companies with monthly penalties for failing to submit Income Tax returns. They are now gearing up to do the same to dormant companies that are registered as employers and have not submitted PAYE returns. They have started, as before, by sending out hundreds of demands for EMP201 and EMP501 returns warning that failure to submit can lead to penalties and legal action. So, don’t think that just because you haven’t traded or you don’t employ anybody, you’re off the hook. Yours is exactly the kind of company that they are going after. You can submit…

Just as the sale of shares in a company owning mainly residential property is deemed, for Transfer Duty purposes, to be the sale of the property, so too is the sale of a trust that owns residential property. A trust will be recognised as having been sold when there is any change of trustees. So what if it was a shelf trust sold for the purpose of buying residential property? Firstly, we prefer not to sell shelf trusts as there’s double work involved, first to form the trust, then to change it. However, occasionally a client…

If you have the intention of becoming reasonably wealthy, then you should form your trust now, or as soon as you can afford it. The cost is currently R12 400 and you’ll also need a company for R1 980. But why the urgency? The answer lies in s56(2)(b) which allows all natural persons to donate up to a total of R100 000 each tax year free of Donations Tax. Now, you and your spouse may not have R100K just lying around waiting to be donated, but you can still donate (before 28 February each year) and owe the money to…

For most companies the answer is no. The Companies Act of 2008 only requires a company to have their financial statements audited if its Public Interest Score is 350 or more. That would typically be a company with an annual turnover of about R300m and 50 employees. So why do we still get companies requesting audited financial statements? Let’s take a look at this. Reason 1. The company’s auditor did not want to lose the business, so failed to advise the owner(s) that not only are audited financial statements not needed, but the company doesn’t even need an auditor. Shame…

Yes, you can, despite my having written an article recently stating that this allowance was terminated on 28 February 2018. I was completely suckered by a member of SAIPA – that’s the wannabe institute of junior accountants who have gone through various names in the past trying to sound like professionals. These were CFA mimicking a very proud and respected body in the UK. They got barred from using that name, so they then called themselves CPA, which, in the USA means the same as CA(SA) does here. They got barred from using that name, so then they finally settled…

There’s no option if your VATable turnover exceeds R1m per annum. If it is less, then you can voluntarily register if it is expected to exceed R50 000 per annum. Let’s take a look at the pros and cons of voluntary registration. But first we need to establish whether , given that your turnover exceeds R1m, you need to register. If the R1m is made up of items not included below as exempt, then they are VATable. Exempt items/services include – Public road and rail transport Rental of residential property Approved educational services Salaries Certain financial services, such as…

Actually, you don’t. A Non-Profit Organisation is an organisation that has been registered with the Department of Social Development as an NPO. It can take various forms from an NGO, a trust, or a Not for Profit Company (NPC). In all cases the Department requires that there shall be at least three unrelated members of the Governing Body. Also, it must have an altruistic motive. Also, your organisation can be registered with SARS as an Exempt (from tax) Institution and a Public Benefit Organisation. If anyone or company then makes a donation to your organisation, they can deduct the…

That only depends on the Trust Deed. There is no legal requirement for a trust to prepare financial statements but some trust deeds include such an obligation along with other unnecessary requirements such as that the trustees must meet at least once a year to consider the financial statements. The problem with stipulations such as these is that if the trustees fail to abide by them they lay the trust open to an interpretation that it is a sham, since they are not taking it seriously themselves. Our advice is to keep the obligations of the trustees to a minimum.

The old B-BBEE affidavit was just a few words and we fitted it neatly into the body of a certificate by myself as a Commissioner of Oaths. It looked pretty good, but now they’ve gone completely overboard, making life for the small businessperson far more complicated than it needs to be. Here’s the original – And here’s the new one – So what have thay achieved? Now you have to state what percentage of your shareholding is held by – Black youth Black disabled Black unemployed Black people in rural areas Black military veterans…

Author: zombie

Build your legacy to last using a trust

Can I sell my dormant company?

Can I register an NGO?

What happens to the Estate Duty allowance if a spouse re-marries?

How much does it cost to form a family trust?

How a trust protects your legacy

Can I buy a VAT registered shelf company?

Be fully prepared for load shedding

How long does it take to form a company in South Africa?

The Double CGT Trap

How to reboot your company after lockdown

Penalties for not submitting PAYE returns even if dormant

When the sale of a trust can lead to Transfer Duty

When should I form a trust?

Must my company prepare audited financial statements?

Can I donate R100K to my trust free of Donations Tax?

Should I register for VAT?

How do I form a Non Profit Organisation?

Does a trust have to prepare financial statements?

New B-BBEE Affidavit