General Business

As Chartered Accountants, we see a lot of sets of accounts prepared by contract bookkeepers and can quickly spot most of the mistakes that they commonly make. Here are our top ten – They forget to bring the share capital to account because nobody actually puts the R100 or R120 into the company’s bank account. The correct entry is debit loan account, credit share capital. Incidentally, in terms of the Companies Act, the shares MUST be paid for, but who’s going to argue about R120? The accountants (us for instance) make year end adjustments to correct the accounts and to…

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,…

Think carefully before you buy a shelf company where you undertake to do the change of directors etc. yourself. There’s a story that goes back to the early days of computers. You know, when the giant stood quietly humming in the middle of a special dust free temperature controlled room. The computer packed up and the boss called in a specialist. The engineer (they weren’t called IT guys in those days) walked slowly around the computer twice in one direction and then once in the other. He paused in thought and then gave the beast a vicious kick on one…

If you want to try doing the job yourself, here’s what you have to do Register with CIPC. Here’s where you find out how. Enter the change of director details. Here’s where you find out how. When you receive the CoR39 by email from CIPC, have all the directors sign it and email it back to CIPC with all supporting documents. This is also detailed in the above link.   Now for what they don’t tell you – The Certified copy of any ID has to be stamped “FOR CIPC PURPOSES ONLY”.

Why would someone want to buy a shelf company instead of forming a new one? Obviously, it is a question of urgency. The urgency can arise for a number of reasons. Typically – You need to submit a tender or a quotation and the customer insists on dealing with a company rather than an individual You want to buy a property in a company owned by a trust and the offer to purchase must be submitted quickly or you’ll lose the deal You want to buy a business as a going concern and have the deal zero rated for VAT…

Don’t be a slave to the 80/20 rule Also known as the Pereto principle. It was Vilfredo Pareto who, in 1906, observed that about 80% of the land in Italy was owned by about 20% of the population. He also noted that about 20% of the pea pods in his garden contained about 80% of the peas! (Wikipedia) So we all know that 80% of our business comes from 20% of our customers and 80% of our debtors is owed by 20% of them as well. And so it goes on. Here are some more from Richard Koch “ Living…

Why two databases is double trouble Way back around the mid seventies, I ventured off to the Computer Fair to buy my first DOS computer (up until then I’d been programming in Basic on an HP85). I got into conversation with an attractive young lady on one of the stands. She obviously knew her stuff and I was trying to decide which of their computers I should buy. She asked me “How big is your database?” “Huh?” I think I might have blushed. I’d never heard of a database! Well, since then I’ve had lots of them and I bet…

5 Essentials you need to get right before starting a business You need to have a product The ability and resources to produce what you are selling is obviously essential. Don’t go out there and win a tender then start figuring out how you are going to fulfill it. That’s for tenderpreneurs and they aren’t building a business, they’re just feeding from the trough. Subcontracting can work and certainly subcontracting part of your offering can make a lot of sense, but you do need a core that is entirely yours. You need to have a market. When I lived in…

You should have read the post “Starting your own business“. It deals with why you want to start a business and the things that often go wrong, but it does not deal with the mechanics. So here goes – 1) You would normally do better to start with a company rather than as a sole trader. We can sell you a company off the shelf or we can form a new company for you. Your best bet is to form a new company so that you can have the name that you want from the word go instead…

The more I read of the new B-BBEE codes, the more I despair. OK, so your company is black owned and your turnover is less then R50m. Great, you get to be Level 1 (Level 2 if only 51% black owned). Does that make you feel good? Why? There are hundreds of thousands of other companies out there with the same score as you! In other words, the market is being flooded with Level 1 and 2 companies. It’s a bit like the hyper-inflation that we saw in Zimbabwe. They just kept printing Zim dollars until there were so many of…

When I meet with you, I take quick notes while I’m talking and listening. My PA then opens a file and titles it with your name and your company name (if you have one). My problem has always been retrieving the file as I’ll maybe remember your first name, your surname or you company name, so what filing sequence to use? The only solution in the past was a cross referencing system which took a lot of maintaining and somehow never really worked. Plus I see a lot of people and ended up with hundreds of files,…