Difference between registering your own CC and buying a Shelf CC
As a result of the Shelf CC not being registered in your name initially when you buy one, you cannot open a bank account in the name of that Close Corporation until you are registered as a member. This means that you cannot trade with the Shelf CC until you are registered as a member of the CC. The member-change process is in itself much more time consuming than a new CC registration.
Disadvantages
of Shelf CC's include:
1. A Shelf CC is ALREADY registered with its business name, there’s a good chance that you may not like the name of the Shelf CC and will have to change it.
2. A Shelf CC is ALREADY registered with its existing members, which means that you have to add yourself as a member before you can register for VAT, open a business bank account or qualify for a business loan until you’re registered as the new member of the Shelf CC.
3. A Shelf CC is ALREADY appointed an Accounting Officer as required by law and there’s a good chance that you may want to have your own accountant and so will have to change that too.
4. Changing the Shelf CC name is time consuming, a waste of money and is exactly what the start-up business CANNOT afford. It takes about 3-6 weeks to change the name of the Close Corporation.
5. Your Close Corporation’s ‘Trading’ name is not protected by law because it’s not the reserved name that the CC was incorporated with. This means that if someone registers a CC with your ‘Trading Name’ you’ll have no recourse and this is what makes it much better to register a new CC with the name you intend to trade with. If somebody tries to register a CC with the same name as yours, their application will be rejected by the Registrar.
Advantages
of Shelf CC's include:
1. The truth is that there are NO advantages when it comes to buying a Shelf CC. It’s a common misconception that one can “Buy” your CC off the “Shelf”. In fact, you will be wasting your time & money buying a Close Corporation that has the incorrect/undesirable NAME, MEMBER and ACCOUNTING OFFICER details for your CC.
Conclusion
It’s highly recommended that you consider registering a new Close Corporation for your business instead of buying a Shelf CC, that’s the reason why I listed the Disadvantages before the Advantages. So unless you have EXTRA MONEY and EXTRA TIME to amend the Shelf CC details to suite your business needs, buying a Shelf CC is kinda foolish!
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