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Economic growth in SA won't happen soon

30 July 2013, 08:46

Let me firstly state a couple of things here for the record ....

  • I am not a racist. I believe that every human being, regardless of race, sex, sexual orientation or religion, are created equal.
  • I LOVE South Africa. I think this country has INCREDIBLE opportunity.
  • I KNOW all countries and all governments has issues.

Ok, facts stated, and HOPEFULLY that will stop all the haters and race card players from blasting this post.

Now ... How does any economy grow?

It grows by producing more, and people buying more. People can only buy more, if they have jobs, which pays them well, and gives them disposable income to spend.

In order for people to have jobs, companies needs to be created, and those companies need to do well, and create more jobs.

Yes, I know, that is an oversimplification, but, it's good enough for the purpose of this post.

When I lived in the United Kingdom, I registered a company there, and it was all done on the Internet, and it cost me £45, which is roughly ZAR 450, or, for US readers, around US$ 70. I did it all myself, and filling in all the forms online, took maybe 5 minutes. I got a PDF document of the registration within a few hours, and within 2 days, received the original documents in the mail at my house.

I also registered a company in the United States. Because I am not present there, I had to go through a lawyer, and costs were slightly higher. Along with company registration fees, tax registration fees, and lawyer fees, I paid around US$ 1,200, which is around ZAR 12,000. This whole process took around a week, which INCLUDED having the original documents sent to me in South Africa via courier.

In South Africa, where we have an incredibly high unemployment rate, one would expect the process of creating a company to be super quick and easy, so as to ensure that companies and jobs are quickly and easily created, which in turn, hopefully creates jobs.

In the beginning of 2011, I began the process of registering a company in South Africa.

I did this through my auditors firm, as they know a lot more about all the intricacies. I don't even know the fees to start it yourself, but, I do know it's a lot of pain to do it yourself, so, I paid my auditors ZAR 5,500 (US$ 562, £365).

To be fair, at this time, the companies law had changed, and the new companies registration company was born, etc.

In the end, the whole process took 9 months, and ended in me sending a SCATHING email to CIPC. The funny thing is, once I sent the email, copied below this post, I got the registration papers the NEXT DAY! ;-)

Fast forward to May of this year, and I need to register another company. By now, I am with a different, and much bigger auditing firm. They suggest I go with a shelf company, as it's much faster.

Right, so, pay them ZAR 7,900 (US$807, £524). This was on 22 May 2013.

4 July, I finally get the registration document. BUT ... The only director (owner) of the company, is the original person who setup the shelf company. I immediately responded back to the auditors, pointing out the issue.

Today, 29 July, and still no update on the fix to the stupid error THEY made.

Bare in mind that I cannot open a business bank account yet, thus, cannot start trading yet, thus, cannot create jobs!

So, on average, it looks like 2 to 6 months to register a company.

Now, once you have registered the company, and you want to do business with the government, OR, your gross income exceeds a certain amount per year, then you are forced by law to take on a BEE (Black Economic Empowerment) partner.

Wait ... What .... Once I do well, I then have to take on a black partner, pay him or her a percentage of revenue, and they add ZERO value to the business.

What incentive is there for ANY company to do well in South Africa, if we are just forced to give away a part of the company?!

Would it not be better to just let the company grow and create more jobs?!

Economic growth in South Africa will not happen any time soon!

The email sent to CIPC:

"Ladies and gentlemen,

It has now been more 6 months since we originally lodged the request for company registration.

Our government, and our president wants companies to create jobs.

If it takes THIS long just to REGISTER a company, can you please explain to me how on earth we can even begin to THINK about creating any jobs.

Without the CORRECT and ORIGINAL registration documents, we cannot open a bank account.

With no bank account, we cannot trade, we cannot pay tax, we cannot hire staff, open offices, or ANYTHING else.

Now, I do understand that you are a government employee, doing mostly nothing 99% of the time, and being paid for the privilege of doing so.

With that in mind, I believe that an incentive to do your job is in order ...

I have kept detailed records of all correspondence up to this point, with EXACT timelines, showing how it is now approaching 7 months since originally lodging the registration papers.

So, if we do not have the original and correct papers in our hands by the end of the calendar month of February 2012, I will have no choice but to go to every single media outlet in the country, informing them of the total ineptitude of all parties involved.

I will write to every minister and government official I can get an address for.

I will make it my sole mission in life to have every single person who has ever touched this registration FIRED.

Now, before you jump on your very high horse and think that I am being a jerk and totally unreasonable .... How would YOU feel if you did not get PAID for 7 months because of the ineptitude of someone else?

Let's ALSO remember your Commission's values listed here:

Customer-focus - All services meet customer needs, demands and expectations which lead to value-added, effective and efficient service delivery.
Accountability - Taking responsibility and ownership for performing assigned work, delivering excellent service and products to clients and achieving Commission objectives.

Not seeing EITHER of those!

KIND Regards,

Richelo Killian"

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