Who is the bidder or his or her representative?
By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.
In Organ of State tenders, the Standard Bidding Document 4 – Declaration of Inters – ask in paragraph 2.1 the following: “Full name of bidder or his or her representative”. This question causes confusion amongst certain bid responders. To add to the confusion the same document refers to company, directors, trustees and members.
To answer the questions in bid documents correctly bid responders needs to understand the different type of business entities that exists in South Africa. There are many types of business that can be operated and registered. Here is a list of the most common busines types in South Africa:
- Sole proprietor / one-man busines
A person can operate a business in his or her own name. The business is not registered as a company or close corporation and the business has no legal power. All the business is done in the name if the owner.
- Partnerships
Partnerships are formed between two or more businesspeople who wants to operate a business for profit. There are many forms of partnerships that can be formed:
- Normal partnerships – are usually formed between professional people such as attorneys or doctors who share office expenses to safe on costs to ensure profits.
- Joint Ventures – are typically formed between two or three businesses to execute a contract joining their recourses to be more competitive and increasing their changes of being successful.
- Consortium – a Consortium is typically formed between more than three businesses to execute a contract combining their recourses to be more competitive and increasing their changes of being successful.
- Legal entities
Legal entities are formed by shareholders to operate a business for profit. In South Africa there are several legal entities that can be registered at the CIPC (Companies and Intellectual Property Commission):
- Private Company ((Pty) Ltd) – a Private Company has between 1 and 50 shareholders. It is a legal entity which is managed by directors on behalf of the shareholders. The shareholders can be natural persons or other legal entities. Private Companies need to have a representative who sign contracts and tenders on behalf of the company.
- Public Company (Ltd) – a Public Company has more than 50 shareholders. It is a legal entity which is managed by directors on behalf of the shareholders. The shareholders can be natural persons or other legal entities. Public Companies need to have a representative who sign contracts and tenders on behalf of the company.
- Close Corporation (CC) – Close Corporations was formed between 1 and 10 MEMBERS. It is a legal entity which is managed by the members on behalf of the members. The members can only be natural persons. Close Corporations need to have a representative who sign contracts and tenders on behalf of the Close Corporations. Existing Close Corporations can still operate in South Africa but since 2008 one cannot register a new Close Corporation anymore.
- Trusts – Business Trusts can be erected to operate a business. A trust is managed by trustees on behalf of its beneficiaries. Business Trusts need to have a representative who sign contracts and tenders on behalf of the Business Trusts.
If the bidder is any of the entities mentioned in points 2 to 4 above, the bidder will have to appoint a representative. The representative is usually the person that has authority to sign tender documents on behalf of the bidding entity.
We hope this brings clarity in responding to tenders.
To learn more about this and many other tender conditions attend our “Become a Tender Expert” 2-Day workshops/webinars presented in Johannesburg, Pretoria, Durban, Port Elizabeth, and Cape Town. Book and pay online at https://howtotender.co.za/tender-expert-form/
Contact us at estelle@howtotender.co.za should you require more information.
You can also purchase a Tender Manual (Handbook) on our website https://howtotender.co.za/ which is a step by step guide how to respond to a South African Tender. It includes examples of completed SBD forms.
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