There are various advantages to set up a company for the ownership of a racehorse:

• A lot of owners say they “race for fun” but it makes make business sense even if you race for fun to make it as much profitable as you can, therefore registering a company to race horse in makes business sense.

• If you buy a horse in the name of the company you become a shareholder and if you are a share holder you can make a loan to the company, therefore you can lend the company money to purchase the horse and if the company makes a profit (the horse through winning stake money and/or being sold for a profit) you can get your loan back before tax and dividends are being paid. You can even get interest on your money.

• A (Pty) Ltd has shares and in the event you want to sell the horse or part thereof you sell the shares. A buyer can select to just buy the horse (asset of the company) in that event the money for the sale would go in the bank account of the company and can be dealt with accordingly.

• In the event of more than one shareholder should a dispute arise and a shareholder(s) wants to sell he/she can offer their share to other shareholder (this can be stipulated in the shareholders agreement) or worst case scenario the % shareholding can be offered for sale per public auction. The shareholder(s) shares as well his/her shareholders loan will be part of the sale.

• All expenses are tax deductable.

• Tax on company is less than personal tax. On companies it is 28% on individuals it is as follows: Income per year

550 101 – 701 300 147 996 + 39% of taxable income above 550 100
701 301 and above 206 964 + 41% of taxable income above 701 300

• Smaller companies can make use of a bookkeeper to maintain the books instead of Auditor which makes it less expensive to keep the books for a smaller company.

• According to the rules of the NHA a company can have it's own Racing Colours, and their don’t have to be a designated nominee. Unfortunately the cost for registering a company is R8000 but the big advantages is if you sell 100% of the shares to a another owner/ company the registered Racing Colours for that company can be included in the sale and the new owner don’t have to lay out any money to register as new owner. If the company race without a nominee no fees for changing of nominee is payable.