Eight things you need to know when you buy a shelf company
Buying a Shelf company on the internet? Here are some of the issues that might arise when you decide to buy a shelf company online.
- The shelf company’s Registered Office Address will be that of the company that formed it, so if you don’t want to keep that address you must ask them to change it, otherwise you will be charged for using their address
- You can’t open a bank account until you are registered as the director(s), unless we do it for you.
- Your appointment as a director is immediate, so you can act for the company, however, some institutions (banks etc per the above) will check the CIPC company registration to confirm your directorship. In those instances, you’ll often satisfy them by producing the resolution appointing you as a director.
- The date of change of director is not the date of registration at CIPC, but is the date set out on the resolution and is usually the date on which you bought the shelf company.
- If you want to change the name, we can usually give you a fair idea of whether your choice of name will be allowed by CIPC.
- While the name is being changed at CIPC you can be “trading as” another name, but don’t put (Pty) Ltd on the end.
- We need to follow a particular sequence in order to avoid conflict of information:
- Open the bank account and give you sole signing powers
- Register you as the director at CIPC
- Change the name of the shelf company you bought online
- The share transfer is immediate and is not registered with CIPC
8 comments
Reply
What are the risks of buying a shelf company? I don’t want to buy a company if they may have entered into a contract in the past that might become my liability/problem somewhere down the line.
How do I protect myself against something like that?
Hi Adelien,
Strictly speaking, you can’t. So, only buy a shelf company from a reputable firm. We have been in practice for 52 years and I am a Professional Engineer and a Chartered Accountant. Both of those bodies would come down on me hard if I sold you a shelf company that was not spotlessly clean.
But why buy a shelf company? A new registration costs R475 and takes a little over a week.
Good Morning, I hope all is well on your.
I am wondering if it’s possible that with a shelf company I can approach a bank to get a loan for a house that would pay itself off when I rent out the rooms as a b&b.
Kind Regards,
Sam
Hi Samukelisiwe,
Certainly it is possible, but a new company would do just as well, because the bank will not be very interested in whether the company is credit worthy. They will require the director(s) to sign personal surety and will only grant the bond if the directors have sufficient income to service it.
I suggest you speak to the bank first.
So with buying a shelf company is it possible to, say for example one is into civil and construction get a ready made company with E,G CIDB grading 5GB/5CE?
Hi Boitumelo
No, it is not possible. In order to qualify for anything above 1 you have to prove your track record and a shelf company would not have one.
Also, we no longer even register shelf companies for level 1 because the grading only lasts for a year, so anybody who bought one after, say 6 months, would only get a half year’s registration.
Good evening
Please send me a quote of the cost for my company name to be registered under that name.
Lesterthms@gmail.com
Lester Thomas.
39 cannes street
Uitzicht
Durbanville
Hi Lester,
It’s only R175. Hardly worth a quote. You can buy here http://www.harbourassociates.co.za or call Mini on 011 805 0030