Ever had to reconcile intercompany loan accounts? They never seem to agree all by themselves do they?I would export them both to Excel then carefully eliminate those transactions that occured in both, constantly watching that the bottom line difference did not change. Then I would end up with transactions in each that did not have corresponding transactions in the other.It was a slow and arduous job.Once I got that far I would check each and resolve the mismatch. Now? Download both to Excel, drop them into AI and say “List the transactions that cause the error”.Moments later you have the…
General Business
We fill in a lot of fillable PDFs for the Master, SARS and CIPC. The information that we need reaches us from Questionnaires that the client submits when they buy a company or a trust. I figured that if Claude.ai could read those questionnaires, maybe it could fill in the forms for us. So, I gave Claude the job. It could read the questionnaires directly from the emails and even the passports and IDs that were attached, although we had to grab those and feed them to Claude directly. OK, Claude, work your magic! Disaster! I spent days trying to…
No, No and No again! Why not? Because AI will search through whatever trust deeds it can find, bung them all together, strip out the obvious rubbish and present the result as its own draft. That’s exactly what an attorney will do if you ask him/her to draft you a trust deed, except for the bit about stripping out the obvious rubbish. I tried it, just for fun, and I quickly recognised many of the mistakes that I see in trust deeds (and I’ve seen hundreds of them) and which led me to devote a whole chapter of my book…
I always tell people in my meetings “Don’t believe anything that anybody tells you, including me!” There is so much garbage out there, often written by “experts” who are just repeating some other “expert’s” garbage. So, always ask for the source from which the opinion was drawn and then check the source yourself. I have now had to extend that to “Don’t believe anything that anybody or any AI tells you, including me!” I often ask Perplexity tax questions and I always ask specifically which sections of which Act are its source. Then, I go to those sections myself and…
Still wondering how AI can make your life easier? Here’s a nice one discovered by Sandi in our Durban office. A client sent her PDFs with loads of cash slips photocopied onto them. All different layouts, formats and suppliers. Sandi uploaded it to Claude.ai and asked him (it?) to schedule them on an Excel spreadsheet and sum the total. Out came a detailed table showing supplier, what was purchased, when and for how much. One of the slips was duplicated and Claude eliminated that without being asked. Claude’s total agreed with that given by the client. I now use Perplexity.ai…
Admittedly, I speak to a lot of people who don’t know the difference between a shareholder and a director, but surely we should be able to expect that CIPC, who are the guardians of the Companies Act, would know the difference? But no, they don’t. Here’s a pop up that you will sometimes get when you are completing a Beneficial Ownership return on the CIPC website. They are insisting on knowing when the Directors were issued their shares! For those of you who, like CIPC, don’t know the difference, here’s a short explanation – The shareholders own the company and…
The best place to start is to watch a couple of AI How to videos, because you need to get an idea of what AI is all about and what it can do for you. Think Chat GPT, Claude, Perplexity. Then sit back and think of the repetitive tasks that you or your staff have to do. You know, the ones that make it difficult not to doze off and bang your head on the keyboard. I used it to read a year’s worth of bank statements and build a cashbook in Excel. It needed some help from my side…
The saga continues. Last August we restored a company from “Final AR deregistration” at CIPC. It went into “In Restoration” mode and we submitted all outstanding returns. Then it correctly went into “In Business”. A month later, we received an email from CIPC warning us that, because the outstanding returns had not been submitted, the reinstatement had not been completed and it was about to be returned to Final AR deregistration. We ignored the email and the company remained “In business”. In March 2026, we received another email from CIPC advising us that, as we had not completed the restoration…
The revised VAT compulsory registration means that if your company turnover is less than R2,3m you could consider deregistering it for VAT. What are the pros and cons? In favour of deregistration You only need to get the bookkeeping done annually. That saves a lot of fees. You don’t have to pay someone to submit the VAT returns. If most of your customers aren’t VAT registered, they will be no worse off if you charge them the same as when you were VAT registered. If you don’t have much Input VAT claim, this will increase your profits by about 15%.…
If the basic amount on a 2nd Provisional tax return is zero and I submit a nil provisional, is there a penalty for understatement if my actual taxable income is less then R1m? That’s the question that I put to ChatBot, Gemini and Perplexity (my favourite). As always, I asked them for the specific reference sections of the relevant Acts from which they drew their conclusion. Answers: Chatbot was so way off track that what it said and the references that it gave are not worth a mention. Gemini, a well argued resounding Yes, you are liable for understatement penalties.…
Did anybody at CIPC ever think to read the amendments to the Companies Act? I’m referring to the Beneficial Ownership requirements. The Act requires that a new Beneficial Ownership Return only be submitted whenever there’s a change. Not only do CIPC insist that there’s a new return every year prior to submitting your Annual CIPC return, but look what they’ve done to welcome us into 2026! Literally hundreds of companies suddenly non-compliant because now we’re in 2026, despite their Annual Returns being up to date!
It doesn’t make sense, because off of that R610 comes R80 VAT, then the CIPC fees of R250, then the additional R60 CIPC fee to download all the registration documents for the client. That leaves us with R300.Then we give away a book “16 Steps to Business” worth R460 plus the first 6 months’ bookkeeping worth at least R3 450. So, either we’re insane or there’s a catch!Well, actually, we’re not insane and there is no catch. It is simply “out of the box” marketing.You see, one morning I woke up to the fact that by far the bulk of…
Most service providers charge about R2 000 to register a new company including registering the name of your choice. Some of them will provide the share certificate(s) and securities register included in their fee. But, if you are looking for the lowest cost option, you can do the job yourself via the CIPC website. It will cost you R250 in CIPC fees. You then have to create a share certificate and share register, and you need to know how to download all the company documents. The option that most people choose is to get us to do the job for…
Let’s say that you own 50 shares and they represent 50% of a company’s share capital. They cost you R1 000. The net Asset Value of the company has grown to R200 000, so your 50% is worth R100 000. Then the directors issue another 100 shares and sell them for R100 000. You now have 1/4 of the share capital and the Net Asset Value is R200 000 + R100 000 = R300 000. So, your shares are now only worth 1/4 x R300 000 = R75 000. Have you suffered a Capital Loss of R25 000 in tax…
I’ve just been looking at a trial balance that shows that there’s R13 750 in the petty cash box. I look at the transactions and all I see is R13 750 going into Petty Cash and nothing coming out. Clearly this is wrong. Now, in the old days, we used to keep a Petty Cash Book and recorded all payments made with cash. This had to reconcile to the amount of cash in the box. A nightmare! Then someone came up with the idea of the Imprest Petty Cash System. Here it is – Put say, R4000 in the box.…
This is almost a daily question so, here’s our advice. The response depends on whether or not you want the company alive. If you don’t want the company We have come up with a simple solution. Provided the company has never traded, we may agree to take it over, restore it and deal with the penalties. At the same time we will also register a new company for you at no charge if you want one. Your problem solved! You end up with a clean company and we deal with the dirty one. Send me an email to derek@harb.co.za giving…
I love this one. I revisited it when someone asked me pretty much this question in a comment to one of my articles. I decided to ask my AI friend, Perplexity.ai, to tell me specifically where in the Companies Act does it state that a company must issue shares, because I have been unable to find such a requirement. The AI responded with various “expert opinions”, all of which said that a company must issue shares. But the AI could not give me a reference in the Companies Act. So, here’s how I responded to the person who posted the…
When we do the bookkeeping for small companies we so often see payments to Wimpy, Dischem, Pick n Pay, Spar and the like. All quite obviously personal expenses. Is there anything wrong with this? Not in law, because the astute bookkeeper will debit these expenses to the business owner’s loan account. The problems are – Some personal expenses will get missed and will be deducted from the company’s taxable income. This is tax fraud. Some business expenses may be inadvertently treated as personal expenses and not be deducted from the company’s taxable income. The additional bookkeeping time spent sorting out…
Because of the business we’re in, we tend to register more companies in our group than we actually need. So, when we ran short of older shelf companies, I dug around and found a 1996 Close Corporation that we had formed, never used and allowed to be deregistered. It’s now possible to reinstate companies that were not trading at the time of deregistration, so we reinstated the old CC, paid R3 500 CIPC penalty fees to complete the 14 outstanding Annual Returns and we then had an antique on the shelf. We renamed it “In Business Since 1996” It sold…
Let’s take a look at what the Companies Act says about this. s13(1) One or more persons may incorporate a profit company, or three or more persons may incorporate a non-profit company. So, we’re back to the definition of a “person”. Interpretations Act – Definitions (x)(b) “person” includes any company incorporated or registered as such under any law. So, yes, it would appear that a company can be one of the incorporators of an NPC. Notice that the Act does not require that the incorporators be unconnected. That only comes into the Income Tax Act. Here’s what the Income Tax…