The Minister of Trade and Industry, Dr Rob Davies and the incoming CEO of FNB, Mr Jacques Celliers today launched a joint initiative aimed at making it easier to start a business through integrated end-user electronic service delivery.
The initiative is in line with government’s appeal for financial institutions to support SMMEs in Africa. First National Bank (FNB) partnered with the Companies and Intellectual Property Commission (CIPC), a public entity reporting to the Department of Trade and Industry (the dti), in an endeavour to streamline the company registration and corporate bank opening processes.
This collaboration partnership with FNB is part of the CIPC’s strategy to roll out a series of end-user services to increase efficiencies and reduce inefficient manual services. CIPC engaged all the banks and designed its systems in such a way that all banks can connect to it. CIPC is aggressively migrating to electronic services through the reduction of inefficient manual services.
“A key theme for the dti and its agencies is continuous improvement and reduction of red tape for the end-user. This is exactly what this project is demonstrating: it is a public private partnership in the true sense of the term, where government and the bank partnered to offer its different products to their mutual customer through an integrated process.
"This FNB partnership is one of a number of initiatives that we are implementing to reduce red tape for small, medium and micro enterprises (SMMEs) and promote efficiencies for end-users,” says Minister Davies.
According to Davies, the Companies Act has specifically included a provision which allows companies to trade with a company registration number and South Africa was the first country to introduce this provision in its legislation.
This collaboration makes it exceptionally easy to open a bank account and register a new company, a vital element in the ease of starting a business - as well as targeted education around the annual renewals process. These customer centric innovations streamline and automate the existing processes to the ultimate benefit of new and existing businesses.
FNB and CIPC have been collaborating for the past 18 months on these innovative approaches with the express aim of easing the administrative burden businesses are currently faced with. The automated approach to the account opening and registration is a world’s first.
Entrepreneurs who wish to open a business bank account have the opportunity to register their companies through the FNB online facility at no additional charge than CIPC’s prescribed fees.
“The process is instantaneous and will reduce red tape, improve service delivery, become more accessible to the broader public and will improve the integrity of the register as well as reduce the turnaround time which is dependent on the speed at which the entrepreneur provides the bank with its “Know your customer” documentation and payment for the service,” says Astrid Ludin, Commissioner of CIPC.
CIPC relies on FNB to conduct identity verification prior to the registration of the enterprise. This is a requirement for both entities by the Companies Act and FICA. As soon as identity verification and residential information are confirmed, applicants data is sent to CIPC for validation.
Once data is validated and the customer registered with CIPC, payment takes place. This partnership is a great milestone for SMMEs in South Africa. “The role of banking institutions has changed over the last few years. SMMEs are important for our economy.
The vast majority of business owners, whether they are starting up a new company or expanding an existing one, need practical support, guidance and assistance in the administrative, compliance and day-to-day operational function of their companies. This innovative partnership is a first in South Africa and will benefit big and small businesses in many ways, ” says Sanjeev Orie, Head of products, FNB Business Banking.
A major achievement is that entrepreneurs are charged the exact fee of R125 for a company registration, excluding the name reservation, as outlined in the regulations of the Companies Act and the process is practically instantaneously. There is no need to mail documents, stand in queues or wait weeks for certificates.
“This service will give small business owners immeasurable value and will prove to enhance the prospects of opening or registering a business successfully. Business clients can now focus on their core functions instead of getting bogged down in time consuming administrative and compliance responsibilities,” concludes Orie.
This major achievement sets the trend for CIPC to become the most innovative registry in the world.
Notes to the editor
About CIPC
CIPC is a public entity established in terms of the Companies Act, 2008 (as amended) reporting to the dti. It is responsible for the registration of companies, co-operatives and Intellectual Property (IP) Rights as well the enforcement of the Companies Act.
It administers fifteen pieces of legislation related to Corporate and IP registration, maintenance and regulation. The vision of the CIPC is to be the gateway to formal economic participation. We continually strive to deliver an efficient cost-effective service to the public through innovation and continuous improvement.
About FNB
FNB Business Banking is committed to supporting entrepreneurs, whether they are starting a new business or running and growing their established business. At FNB Business Banking we believe we have the solutions to support small businesses and to reduce their costs. In line with government’s appeal for businesses to assist in creating jobs, we believe that certain of our solutions can assist in this regard.
About the process
This process allows for Company Registration without registration of a company name. The following options w.r.t. naming reservations are available to new business owners wanting to register a company through this process:
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No company name, using a trading or business name, which is not registered companies have the option of selecting its own business name or trading name, which is not registered with CIPC.
There is provision for trading names in our Application Process. There is no fee or specific process attached to this arrangement. The only risk is if another company who owns that name as a Registered Company Name or Trade Mark, legally opposes the use of such a name, you might be asked to stop using it.
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No company name, using an enterprise number.This is what we currently accommodate through our business account application process. Nothing prevents the entity from trading with only a company registration number.
- Attaching a name ( by registering one) after company registration companies that wish to attach a name to a company after registration through our applications need to reserve a name through the CIPC website. This costs R50.
To add this name to the company, a special resolution has to be lodged with CIPC as it is considered an amendment to the company. This costs R250 (Note that the Commissioner and Deputy Commissioner of the dti is in the process interacting with the Minister to ask for these fees to be waived.)
