Johannesburg - First National Bank (FNB) appears to have stolen a march on its competitors with the launch of a world-first service, in collaboration with the Companies and Intellectual Property Commission (CIPC), that will allow a bank client to register a business and open a business account within 24 hours.
The client will be charged R125 for the registration service, which is the same fee charged if registration is done directly with the CIPC.
While the 24-hour turnaround time and the R125 fee represent an attractive proposal for people planning to set up a business, it will only enable them to get a registration number. Registering a company with a name will cost an additional R300 and will take an additional four weeks at least.
At a press conference yesterday, Trade and Industry Minister Rob Davies acknowledged that people did want to have a name for their companies, but in terms of the new Companies Act a name was not necessary. “You can operate a business on the basis of the registration number.”
Davies said South Africa was the first country to offer this facility.
“A key theme for the Department of Trade and Industry and its agencies is continuous improvement and reduction in 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 (the) government and the bank partnered to offer different products to their mutual customers through an integrated process.”
Davies said the reduction in red tape stemmed from the fact that banks were required to have much of the same information that was necessary to register a company.
He said that reducing red tape was not the same thing as deregulation. “Red tape is when there is an unnecessary duplication of information.”
Davies referred to the much-criticised Business Licensing Bill, which would require companies to register in municipalities in which they traded, noting that it had “gone back for further consultation”.
He said the government was faced with a “significant challenge” to reduce the opportunities for operating illegally.
With regard to possible job losses at “intermediary” firms that provide registration services for individuals wanting to set up businesses, Davies said intermediaries would have to provide additional services to justify their existence.
The ability to open a bank account and register a company at the same time is expected to be a major competitive advantage for FNB. Some 18 months ago, the CIPC identified the opportunity to streamline the registration process by partnering with banks. It approached all the major banks and FNB responded.
Other banks have indicated that they are interested in providing similar services. A spokesperson for Standard Bank told Business Report that assisting customers to register new business ventures “is important to Standard Bank and we have met with the CIPC to consider opportunities to partner with them to provide an improved service to customers”.
One intermediary told Business Report yesterday that while FNB’s extensive presence across the country would be a significant advantage in offering the service, in terms of cost and time it was not much better than the intermediaries.
“We initially offered the service on the basis of registering a number rather than a name to ensure speed, which is what FNB is offering, but it backfired on us because when we subsequently tried to register a name to replace the number, everything slowed down.”
He also noted that while the R125 being charged by FNB looked cheap, it was necessary to remember that an additional R300 would have to be paid to register a company name. “And it should be seen in the context of the total costs charged by banks every month.” - Business Report