Selling a Property Under a Business

Selling property held by a company (Pty Ltd) or close corporation (CC) is different from selling as an individual. Here's what is required when selling a property under a business.

Your Role as Seller

The seller is the entity (company or CC), not the directors or members. The entity acts through its authorised signatories. Banks and conveyancers will require a board or member resolution authorising the sale of the property and naming the signatories. The transfer attorney will need the entity's registration documents, resolution, and proof that the signatories are authorised to sign on behalf of the entity.

What Is Required: Documents

• Registration documents: Certificate of Incorporation (company) or Registration Certificate (CC).
• Resolution: A board or member resolution authorising the sale of the property and naming the signatories.
• FICA for the entity: Proof of identity and address of directors/members, and proof of business address.
• Tax and compliance: Tax number, VAT (if applicable), and proof that the entity is in good standing (e.g. no outstanding taxes or CIPC compliance).
• Mandatory disclosure: Complete the disclosure form honestly; the entity (seller) must disclose known defects.

Bond Cancellation (If the Business Has a Bond)

If the entity has a bond over the property, the bond must be cancelled before or simultaneously with transfer. The cancellation attorney (appointed by the bank) will cancel the bond. The seller (entity) typically pays the cancellation costs. Ensure the entity has funds set aside for this, or that the sale price covers the outstanding bond and costs. Directors or members may be sureties—check with the bank and your attorney.

Tax Considerations

Selling property held by a company or CC can have capital gains tax (CGT) or income tax implications, depending on how the property was used (e.g. trading stock vs capital asset). Speak to your accountant before you list or accept an offer so you understand the net proceeds after tax and costs.

Tip: Have the resolution and entity documents ready before you list. Buyers and conveyancers will ask for them early. Delays in providing entity documents can delay the whole transfer.