How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask CaseLaw Your Own Question
CaseLaw
CaseLaw, Attorney
Category: South Africa Law
Satisfied Customers: 1395
Experience:  BCom; LLB; Masters in Law
31036262
Type Your South Africa Law Question Here...
CaseLaw is online now
A new question is answered every 9 seconds

What is the total cost involved in purchasing shares in a

Customer Question

What is the total cost involved in purchasing shares in a private company from a shareholder/director who is selling the business to me. Is there any taxes on the transfer of the shares and if yes, approx. how much. I am not referring to the tax on capital gains the seller must pay, only as to the transfer of the shares to my name.
Submitted: 1 year ago.
Category: South Africa Law
Expert:  CaseLaw replied 1 year ago.

Hi there and thank you for your question,

There is no tax that is payable by you when purchasing shares in a privately held company.

The shares are purely an asset in the seller's name, and you're simply purchasing that asset.

When you SELL the shares however, you may find that you're liable for CGT on the increase in value of the shares, but that's a story for the future.

The only cost that you will need to pay is the purchase price of the shares to the current owner, and also possibly for a sale of shares agreement to be drawn up by a lawyer to cover you.

You may need to submit a CoR39 to CIPC, but that could only cost a few hundred rands.

http://www.cipc.co.za/index.php/manage-your-business/manage-your-company/private-company/making-changes-your-companys-management-administration-and-governance/appointment-resignation-or-removal-directors/

If my answer hasn't answered all of your questions, please send me a REPLY with follow up questions so that I can continue to assist you in this same thread for as long as you need. Let me know if you need more advice - don't just rate my answer as "bad".

If my are HAPPY with my answer then please click one of the SMILEY FACES to rate my answer and then click the GREEN ACCEPT button to accept the answer.

Good luck and best regards,

CaseLaw

Please note: This answer does not create an attorney-client relationship. Please consult a local attorney in person for legal advice. This information is being provided so you can better discuss legal matters with your attorney.

Expert:  CaseLaw replied 1 year ago.

Hi there again,

I hope that you understood the above advice and that it was useful? Please leave positive feedback for me.

If you have a further question please ask it?

Regards

CaseLaw