Buying a Property as a Business

Buying property in a company (Pty Ltd) or close corporation (CC) name is different from buying as an individual. Here's what is required when buying a property as a business.

Why Buy in a Business Name?

Businesses often buy property for premises, investment, or asset holding. The buyer on the Offer to Purchase and the bond application is the entity (company or CC), not the individual directors or members. Banks and conveyancers treat entity purchases differently from personal purchases.

What Is Required: Documents

• Registration documents: Certificate of Incorporation (company) or Registration Certificate (CC).
• Resolution: A board or member resolution authorising the purchase of the property and naming the signatories.
• FICA for the entity: Proof of identity and address of directors/members, and proof of business address (e.g. utility bill, CIPC document).
• Tax and compliance: Tax number, VAT registration (if applicable), and proof that the entity is in good standing (e.g. no outstanding taxes or CIPC compliance).

Bond Requirements When Buying as a Business

Not all banks lend to companies or CCs for property purchase. Those that do typically require:

• Financials: Audited or management accounts, cash flow, and proof of ability to repay.
• Personal suretyship: Directors or members are often required to sign as sureties, making them personally liable if the entity defaults.
• Larger deposits: Banks may require a higher deposit (e.g. 20–30%) for entity purchases.
• Different rates and terms: Interest rates and fees can differ from personal bonds. Use a bond originator who deals with commercial or entity applications.

Tip: Speak to a bond originator and your accountant before you make an offer. Entity purchases have tax (e.g. transfer duty, future CGT or income tax) and compliance implications that differ from personal purchases.