If you own a small business and do not have the above in place and need help to set it up, please feel free to contact Marissa Burness from Tax Shop Bedfordview to assist you and help you stay compliant with the Companies Act.
As Entrepreneurs, we all start our business with a passion, skill or experience in our certain industry, product or service. We know the product and sometimes even how to market it, but no one ever taught us how to run a business, much less all the statutory requirements and periodic responsibilities that go along with it.
It is very easy, with today’s technology to log into CIPC and register our own business, sometimes multiple businesses, but we never seem to read all the fine print CIPC sends us when they have approved the registration and therefor we are not aware that our business must issue share certificates to the shareholders, and we must keep a share register.
This is one of the most overlooked, yet very important statutory requirements within a small business and we only tend to notice the absence of these documents when we have a dispute amongst owners of the business, when they want to leave the business or the business is dissolved, or when we want to take on more shareholders and declare more shares.
The share certificate is legal proof of ownership of a company and clearly details the personal details of the relevant shareholder, when the shares were acquired and at what rate. Each share certificate holds its own unique number and this number with the rest of the share transaction must be kept in a register and updated as any changes arise.
Further to that, when registering a business we have to write a Memorandum of Incorporation, which clearly sets out the rights, duties and responsibilities of shareholders, directors and others within a company and how shares must handled. If there is any change to our policies around this we must update the MOI accordingly. We may go further and set up a Shareholders Agreement which mirrors the MOI. A very basic MOI is registered for you by CICP when registering the business, you can obtain this from the CIPC website.
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