Registered a new company - what documentation is needed?

[OldGoat]

Hi All.

I recently registered my company (finally) and am in the process of buying a car through the it... which is not easy

I am signing surety but the bank is asking for a whole host of forms which I don't have.

They are asking for;

• CM29
• The first 5 pages of Memorandum Articles and Association
• Most recent version of the Certificate of Incorporation (form CM 1)
• Notice of Registered Office Postal Address (form CM 22).

As far as I can see, the company registration certificate has all the info required (CoR 14.3)...

What the heck are these and how do I go about getting them?

[dcs]

All of these forms are required when registering the company, and you should be able to get them from whoever registered the company for you. You can get copies from Cipro for a fee, I think. More importantly, signing surety is not a good thing to do - the banks use sureties for all sorts of things you never dreamed of - none of them in your interests at all. Way better to buy the vehicle in your own name to avoid the sureties. It makes very little difference whether the vehicle is in your name or the business name, but the surety is another matter altogether.

[OldGoat]

All of these forms are required when registering the company, and you should be able to get them from whoever registered the company for you. You can get copies from Cipro for a fee, I think. More importantly, signing surety is not a good thing to do - the banks use sureties for all sorts of things you never dreamed of - none of them in your interests at all. Way better to buy the vehicle in your own name to avoid the sureties. It makes very little difference whether the vehicle is in your name or the business name, but the surety is another matter altogether.

Thanks for the info but then how does the company pay for the car? Wouldn't the tax man see the vehicle as mine and the payments part of my remuneration?

[dcs]

The company physically makes the payments for the vehicle from its bank account. All transactions relating to the car are done in the name of the company and are treated as if the vehicle is registered in the company name. You could also treat the purchase of the car as a loan to the company. All this is very commonplace in business and does not attract undue attention from the Revenue authorities. The registered name only matters when there is a transfer of ownership or where repayments are not made. If repayments are not made and the car is in your name they repossess the car. If repayments are not made and the car is in the company name they take your house as it will cover their expenses, value of the car etc. because you signed a surety.

[OldGoat]

they take your house

OK, that cleared that up
Thank you so much for your advice. Much appreciated.

[Dave A]

They'll "take your house" if the car and loan is registered in your name too, so I don't get why putting the vehicle in your name rather than the company's alleviates the risk

My tip would be - if you sign a surety, make sure it is for the item being financed only. That way when the finance on that item is paid up, the surety dies too.

Do not, under any circumstances sign an open surety. This is a surety which underwrites not only the debt you're incurring now, but any other finance, both current or in the future, between the debtor and financier.

I gently suggest the issue of whether to buy the vehicle in the company or in your own name is mostly driven by how it is going to be deployed. If there is no personal use, I'm not sure there's any significant benefit in buying it in your own name rather than in the name of the company. (If I'm missing something, please don't hesitate to correct me).

In terms of required company documentation, I have found of late that despite the long list typically requested, simply providing copies of the CM1 and CoR39 tends to keep everyone happy.

[dcs]

I think that the point needs to be made that if you sign a surety at a South African bank, any asset may be seized and full payment may be demanded immediately. To the best of my knowledge a surety also falls outside the ambit of the Consumer Protection Act and this allows many additional evils. The last time I required a loan, the bank refused any alteration to the surety document (so it remained an open surety) and after the loan was repaid they refused to return the surety and instead insisted they I apply in writing for a letter which would state that they would no longer rely on the surety. My view is never sign a surety - period.

[Dave A]

To the best of my knowledge a surety also falls outside the ambit of the Consumer Protection Act and this allows many additional evils.

Just checking - you didn't perhaps intend to refer to the National Credit Act?

[dcs]

Dave, as always you are correct - but, I think, probably both acts may be applicable.

[Dave A]

Dave, as always you are correct

Rest assured, far from always.

That's why I'm such a fan of the forum format - it comes with a built-in correction functionality.
(Other people's posts, in case you were wondering).