A collaboration between First National Bank (FNB) and the Companies and Intellectual Property Commission (CIPC) now allows entrepreneurs to almost instantaneously register a company, while opening a bank account.
The initiative aims to trim the red tape burden for companies and is claimed to be a world-first. It was launched this morning in Sandton by trade and industry minister Rob Davies and incoming FNB CEO Jacques Celliers.
Under the process, business owners apply for an FNB business account through the FNB Web site, complete the application and submit the required supporting documents. After the customer has paid the CIPC registration fee, the registration process takes a few seconds.
The CIPC registers 20 000 new companies a month, of which 70% are done electronically.
FNB and CIPC have been collaborating for the past 18 months on "innovative" approaches to ease administrative burdens for businesses, the two say in a statement. "The automated approach to the account opening and registration is a world first."
Celliers says "at a global level, we're very proud of what we've done".
Additional services, such as real-time annual return filings and director change filings, are being explored and the offering is set to be rolled out to the other banks.
Open to all
Davies says the department, which is the custodian of the CIPC, wants the service to be extended across the banking sector.
CIPC's Web services were designed in such a way that any other trusted partners can connect to it. Discussions were held with Absa, Nedbank and Standard Bank, and the level of readiness varies from bank to bank.
The offer costs the same as the CIPC's prescribed fees, which is R125 for a company registration, and trims the need to use agents. The R125 excludes the name reservation, which is no longer required for companies to trade after the Companies Act was amended. Registering a name takes 20 days and it costs R50 to reserve a name and R250 to link the name to the entity.
Getting a registration number is "practically instantaneously" and there is no need to mail documents, stand in queues or wait weeks for certificates, say the entities.
"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 CIPC commissioner Astrid Ludin.
CIPC and FNB developed a solution that allows for the non-online lodgement of data through XML files, which are e-mailed between the two parties. There is no human intervention in the process.
CIPC relies on FNB to conduct identity verification prior to the registration of the enterprise, which must be done in terms of the Companies Act and the Financial Intelligence Centre Act. As soon as identity verification and residential information are confirmed, the applicants' data is sent to CIPC for validation. Once data is validated and the customer registered with CIPC, payment takes place.
Trimming red tape
Sanjeev Orie, head of products at FNB Business Banking, says the service will 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," says Orie.
The joint initiative is aimed at making it easier to start a business through integrated end-user electronic service delivery and fits in with government's appeal for financial institutions to support small, medium and micro enterprises in Africa.
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.
The CIPC is aggressively migrating to electronic services through the reduction of inefficient manual services, says a joint statement issued by the entities. "This FNB partnership is one of a number of initiatives that we are implementing to reduce red tape for SMMEs and promote efficiencies for end-users," says Davies.