Must my business be registered in order to tender?
By Werner van Rooyen
1 September 2014
Once, a very anxious business owner phoned me and asked if I could supply him with a CK number. I was amused by this and first asked why he asked me for such a number and secondly what did he need a CK number for? He said that because he had bought my Tender Manual he thought that may be I can help him with a CK number. Also, at the briefing session of the tender which he was responding to, the person in charge of the tender said that if the responders to this tender didn`t have a CK number their tender responses would be disqualified!
Obviously I was flattered by the compliment that this person thought I could help him with everything regarding his tender response but I was really confused why all responders to this specific tender needed a CK number. Now for those of you that do not know what a CK number is, it is the general term that is given for a Close Corporation registration number; all Close Corporation numbers started with the prefix CK followed by some numbers. The ridiculousness of this statement - that all responders must provide a CK number - just proved how little this official new about business in general in South Africa.
This brings us to the question - must I have a registered business to respond to tenders in South Africa. The short answer is simply no; you don`t need a registered business to respond to a tender.
In South Africa you can do business via various entities. The most popular of course is a private company or (Pty) Ltd as it is commonly known. In 1984 the South African Government of the time thought it good to give an alternative to the private company in the form of a close corporation. The idea behind the close corporation was to make it easier for entrepreneurs to have access to a legal business entity. The close corporation as a legal entity was very popular in the 1980`s and 1990`s. It became less popular as business owners realized that it didn`t provide sufficient security against them personally and eventually close corporation registrations were stopped in 2011. Close corporations that are still in existence can still operate but no new ones are allowed to register.
The fact of the matter is that if you respond to public sector tenders you are allowed to respond in your own name. The standard bidding documents makes provision for this. Just remember that you will still need all the compulsory documents to respond to the tender albeit in your own name.
Then there is the question of experience; the Evaluation Committee members may think that you lack experience if you do not respond in the name of a legal entity. And as we all know, experience counts when you respond to a tender.
Until next time, keep on responding to those tenders and if you need an edge visit our website atwww.how2tender.com for more information or buy our Tender Manual.