New firms face chaos

Johannesburg - On Wednesday the Companies and Intellectual Property Registration Office (Cipro) admitted it did not have the capacity to handle the large number of applications for new close corporations (CCs) and companies.

Hundreds of people were seen standing in queues at Cipro's office in Pretoria, hoping to register businesses.

Until a business receives official documents from Cipro, it cannot open a bank account, receive a VAT number or do business in the formal economy.

Acting Cipro head Renier du Toit (standing in for Keith Sendwe, whose two-week absence has been ascribed to "poor health") acknowledged that Cipro's systems are not adequate to handle the volume of transactions.

He said that some of the problems would be resolved when a comprehensive new enterprise content management (ECM) system becomes fully operational.

System glitches in January also led to a backlog OF applications, said Joey Mathekga, acting executive manager for client services. Cipro receives about 1 500 applications daily to reserve proprietary names.

On Wednesday queues overflowed the doors of Cipro's head office at the department of trade and industry in Pretoria.

Mathekga said the biggest hold-up was in the reservation of names for new businesses, as well as in changes to directorships or other information for already-registered firms.

Strict new rules on name registration were introduced last year, after the South African Revenue Service lost millions because fraudsters were able to "clone" companies on Cipro's database and open illegal bank accounts.

Five Cipro employees were suspended in August 2009 because of alleged complicity. Du Toit declined to comment whether disciplinary steps had been taken against them, or whether any criminal charges had been filed with the police.

- Sake24.com

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