Korporatiewe beheer – ’n trust as ’n lid van ’n Beslote Korporasie

Business , ,

Die Wet op Beslote Korporasies No 69 van 1984 (“die Wet”) het voorsiening gemaak vir die oprigting van beslote korporasies wat eenvoudige, gedereguleerde en buigsame entiteite met beperkte aanspreeklikheid is wat veral vir klein ondernemings geskik is. Hulle het eie regspersoonlikheid en geniet die voordele van ewigdurende opvolging.

 

Die Maatskappywet No 71 van 2008, verbied egter die registrasie van enige nuwe beslote korporasies na 1 Mei 2011. Beslote korporasies kan omgeskakel word na maatskappye, maar maatskappye kan nie meer omgeskakel word na beslote korporasies nie. Reeds bestaande beslote korporasies word egter geadministreer deur die Wet.

 

’n Beslote korporasie het nie aandeelhouers nie, maar wel lede en aangesien ’n beslote korporasie afsonderlike regspersoonlikheid het, staan dit onafhanklik en verwyderd van sy lede. ’n Beslote korporasie kan uit ’n minimum van een lid tot ’n maksimum van tien lede bestaan. Die beperking op die aantal lede beklemtoon die wetgewer se bedoeling dat die beslote korporasie bedoel was vir kleiner ondernemings, waar die verhouding tussen die lede soortgelyk aan dié van vennote is.

 

Die Wet stipuleer in Artikel 29 dat slegs natuurlike persone lede mag wees van ’n beslote korporasie. Verder beklemtoon hierdie artikel dat ’n natuurlike of regspersoon in sy of haar kapasiteit as ’n trustee van ’n inter vivos trust ’n lid van ’n beslote korporasie kan wees as daar aan sekere vereistes voldoen word, naamlik:

 

  • Geen regspersoon mag direk of indirek ’n begunstigde wees van daardie trust nie;
  • Die lid sal dieselfde regsverpligtinge hê tussen homself of haarself en die beslote korporasie as wat ’n natuurlike persoon sou hê;
  • Die beslote korporasie is nie verplig, of het geen verpligting om enige ooreenkoms tussen die trust en die betrokke lid van die korporasie te onderhou of na te kom nie;
  • Indien die aantal natuurlike persone wat geregtig is om enige voordeel van die trust te ontvang, ter enige tyd wanneer hulle by die beslote korporasie gevoeg word, aanleiding gee daartoe dat die aantal lede van die korporasie meer as 10 word, sal die bepalings en voorwaardes waarvoor voorsiening gemaak word in hierdie artikel nie meer langer van toepassing wees nie.

 

Gevolglik sal die volgende persone gemagtig wees om as lede van ’n beslote korporasie te dien:

 

  1. ’n Natuurlike persoon
  2. ’n Natuurlike of regspersoon in sy of haar hoedanigheid as ’n trustee van ’n testamentêre of inter vivos trust wat as verteenwoordiger van daardie trust optree, behalwe indien: 
  • Die persoon ’n begunstigde van die trust is;
  • Die trustee ’n regspersoon is, en direk of indirek beheer word deur enige van die begunstigdes van die trust; en
  • ’n Natuurlike of regspersoon in sy of haar verteenwoordigende kapasiteit, insolvent, oorlede, verstandelik gestremd of andersins onbevoegd is om sy of haar eie sake te bestuur, ’n trustee van sy of haar eie boedel is of ’n administrateur, eksekuteur of kurator van sodanige boedel is.

 

Onderworpe aan die uitsonderings soos hierbo gestipuleer, mag slegs natuurlike persone lede van ’n beslote korporasie wees en mag geen regspersoon ’n ledebelang in ’n beslote korporasie hou nie. ’n Maatskappy of beslote korporasie kan dus nie ’n lid van ’n beslote korporasie wees nie en enige oortreding van hierdie verbod kan tot gevolg hê dat die regspersoon aanspreeklik sal wees vir sekere skulde van die beslote korporasie. ’n Beslote korporasie mag wel ’n lid van ’n maatskappy of vennootskap wees en ’n beslote korporasie kan selfs die beherende aandeelhouer van ’n maatskappy word.

 

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

From Xero to Hero

Business , ,

The internet and modern communications technology has changed everything, including the way that businesses keep their records up to date; one new approach we recommend has at its heart the cloud based accounting software, Xero.

 

In a nutshell, Xero allows you to update and view the financial state of your business in real time, from almost anywhere. And, as your appointed advisors, because we can see exactly the same information you can, we can give you the advice you need, when you need it.

 

Why do we like Xero so much? Because it’s so easy and convenient for our clients to use. Nobody knows more about your sales and purchases than you do. So it makes perfect sense for you to record your business transactions, as they happen, rather than months after the event.

 

With Xero, you don’t need to worry about data backup or software updates – it’s all in the cloud, so everything is always secure and up to date. And rather than paying for us to just typing in your data, you are able to pay us for providing you with valuable advice and guidance that will help you to make your business a success.

 

Contact Zuydam Konsult to see how we can help you implement Xero today.

 

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Tax allowances against assets used for purposes of trade

Business , ,
The Income Tax Act[1] allows for various income tax allowances to be claimed in respect of moveable assets used for purposes of a taxpayer’s trade.

 

Most commonly, section 11(e) provides for a deduction equal to the amount by which the value of any machinery, plant, implements, utensils and articles have diminished by reason of wear and tear during the tax year. Typically, these assets must be owned by the taxpayer, or must be in the process of being acquired. Where an asset was acquired during the year, the allowance provided for in section 11(e) is proportionally reduced according to the period of use during the year.

 

There are however various other specific asset allowances which may rather regulate whether a wear and tear allowance is available for tax purposes, depending on the nature of the specific asset or which specific industry the taxpayer operates in. Should the relevant requirements for these provisions rather be applicable, the section 11(e) allowance will not apply.

 

For example, section 12B provides for an accelerated allowance (generally split over three years on a 50/30/20 ratio) for certain plant, equipment and machinery used for farming purposes, the production of renewable energy such as bio-diesel or bio-ethanol products or the generation of electricity from wind, sunlight, etc. Section 12C again provides for a tax allowance in respect of assets used for manufacturing, co-operatives, hotels, ships and aircraft. Section 12E allows for a 100% write off of the cost of plant and machinery brought into use by a “small business corporation” in certain circumstances. Other (maybe lesser known) tax allowances include section 12F (providing for an allowance for qualifying airport and port assets) and section 12I (an additional investment and training allowance in respect of industrial policy projects). There are also various provisions in the Income Tax Act providing specifically for an allowance against which the value of buildings owned by a taxpayer and used for purposes of trade can be written down for tax purposes.

 

It is important to note that each of these provisions has very specific requirements regarding the type of qualifying assets that could potentially qualify for the allowance. This includes whether or not the specific asset is new and unused and if any improvements to the qualifying assets may also be taken into account. Other important considerations include who the relevant taxpayer is, when the asset was brought into use by that taxpayer for the first time and the costs to be taken into account in calculating the relevant allowance.

 

The take away is that taxpayers must continuously evaluate their asset registers to confirm that all assets are correctly classified for income tax purposes and that the correct tax allowances are claimed in respect of these assets. The most important consideration of all though is to ensure that available allowances provided for in the Income Tax Act are utilised where appropriate to do so.

 

[1] No. 58 of 1962

 

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

What should you consider when investing in a business

Business , ,

You have worked hard for many years, and have finally saved enough funds and mustered the courage to take the big leap that you have been dreaming about for such a long time… you are going to invest in your own business.

 

You have found the perfect business and is excited about your new journey, when you suddenly realise, however, that you have never been in this situation, and suddenly have no idea what to do next.

 

The first step

 

It is important to understand what you wish to gain out of your investment. Some people may solely invest in a business for financial gain, while for others it may be fulfilling a life-long dream, or to chase a very specific passion, such as having the opportunity to jump out of an airplane every single day through your newly acquired skydiving school, for instance.

 

Although motivation will differ for each person and will likely include a number of factors, it is important to understand what drives your decisions, in order to invest smartly.

 

Start with the end in mind

 

Once you understand the why behind your investment decision, it is a good principle to start with the end in mind. Ask yourself where do I want to be in the next three to five years (skydiving every day, the richest person in my street, having loads of free time, etc.) and how you will be able to leverage your business to get you there.

 

Good questions to ask might include –

  1. Is the business scalable (the ability to multiply a business model);
  2. Is the business labour/time intensive;
  3. Do you have adequate and necessary skills to manage the business;
  4. Are you aware of all the risks that you are assuming through investment;
  5. Is the price that you are willing to pay for the business substantiated and reasonable;
  6. Etc.

 

Practical considerations

 

In practical terms, there are a number of ways in which to invest in a business, primarily including acquisition of a going concern, as opposed to equity/members interest in an existing entity. It is also important to understand the advantages/disadvantages of the structure in which you choose to invest. You might decide to invest as a sole proprietor, through a company, a corporate structure or a trust (etc.) for instance.

 

The above considerations can have a major influence on a variety of factors, including statutory risk, tax consequences, contracting procedures, etc. and if the process is not approached correctly, it can cause many unnecessary headaches in the long-run.

 

Summary

 

Investing in a business, is no doubt always a very exciting prospect which, if approached correctly, can have a profoundly positive impact on a person’s life. It can be a precarious process, however, if not negotiated carefully.

 

It is therefore recommended to find a credible and experienced partner, to help guide you through the process, and even to further strategically aid and assist you post the investment.

 

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

How the VAT increase affects your business

Business , ,

Consumers and suppliers have by now had an opportunity to familiarise themselves with the increased Value-Added Tax (VAT) rate of 15% since 1 April 2018. There are however many technical considerations related to the increase that remain unclear. One such an uncertainty is with regards to deposits paid prior to the effective date of the increase, while goods and services are only rendered thereafter.

 

VAT vendors often require that consumers pay a deposit to secure the future delivery of goods or services (for example, an advance payment for the manufacture of goods, bookings in advance for holidays or accommodation etc.). The deposit paid by the consumer is then off-set against the full purchase price once they eventually receive the goods or services. The question arises what VAT rate the consumer will finally be subject to, where they paid a deposit before 1 April 2018, but the actual delivery of goods or services only takes place thereafter.

 

The answer to this question is found in the time of supply rules contained in section 9 of the Value-Added Tax Act.[1] In terms thereof, the “time of supply” of goods and services is at the time an invoice is issued by a supplier, or the time any payment of consideration is received by the supplier, whichever is the earlier. Two important concepts stem from this rule.

 

Firstly, an “invoice” needs to be issued by a supplier. In terms of section 1 of the VAT Act, an “invoice” is a document notifying someone of an obligation to make payment. It is therefore not necessary that a “tax invoice” – which has very specific requirements – needs to be issued. If consumers received only a “booking confirmation”, “acknowledgment of receipt” or similar document prior to 1 April 2018 that did not demand payment (such as tax invoice or pro-forma invoice), the time of supply was not triggered, and consumers will be subject to the 15% VAT rate once the goods or services are finally delivered after 1 April 2018.

 

Secondly, any deposit that was paid by the consumer, would have had to be applied as “consideration” for the supply of the goods or services to constitute “payment”. In this regard, consumers are largely dependent on how VAT vendors account for deposits in their financial systems. If deposits are accounted for separately (which is often the case with refundable deposits or where there are conditions attached to the supply) and only recognised as a supply when goods or services are received by the consumer, the deposit (although a transfer of money has occurred), would not constitute “payment”. For example, the time of supply may only be triggered once a guest has completed their stay at a guest house after 1 April 2018, resulting in VAT being levied at 15%.

 

The take away from the time of supply rules is therefore that payment of a deposit prior to 1 April 2018 does not necessarily result in a supply at 14% VAT and the rate to be applied is dependent on the specific facts of each case. Both consumers and VAT vendors should also take note that there are a number of rate specific rules that apply during the transition phase, and are encouraged to seek advice from a tax professional when they are in doubt about the rate to be applied.

 

[1] 89 of 1991 (the “VAT-Act”)

 

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

1 2 3 4
[tm-current-year] © RustGold Transport | Tel. +27 (0)14 537 2358 |