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TOPIC: What is the business term for...

Re: What is the business term for... 8 years 9 months ago #3372

  • Matthew Haddon
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Hi Rudi

I think the term you are looking for is a holding company. A holding company is a seperate entity used to own the shares in its subsidiaries to avert risk to the shareholders. in some cases it offers management and oversight duties as well as usually the holding company is the major shareholder in the subsidiary companies.

There is no specific registration you need to adhere to, just register a company through the cipc and then amend the share certificates in the other two companies to make the new entity the owner. There migt be cgt implications here though so seek advice before doing so. There are also likely to be securities transfer tax implications too as the shares are changing hands from individuals to an entity the individuals are members of.

Remember that the holding company will need to file tax returns and more importantly, cipc annual returns. Allowing your holding company to be deregistered because the annual returns weren't filed means all assets owned by the holding company revert to the state. Although unlikely, a big point of concern to be mindful of.

Good luck!
Matthew
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