COMPANIES AND COMPANY REGISTRATIONS

In South Africa, where individuals are interested in starting their own company and have it run as a separate legal entity, it should be registered with a government body called the Companies and Intellectual Property Commission(“CIPC) formerly known as Companies and Intellectual Properties Registration Office(“CIPRO”).

As per the website, the “CIPC is the registrar of companies, close corporations, co-operatives, trademarks, patents, designs and copyright for cinematographic films in the Republic of South Africa.

Many individuals further find themselves in a situation where there are uncertainties as to what form of company they would like to register. The different types of companies are dealt with hereunder:

  1. Close Corporations (“CC”)

A CC is a legal entity similar to a company. A CC is run and administered by its members, who must be natural persons (i.e. not other legal entities). A CC’s members are like a company’s directors.  The members of a close corporation usually choose the entity because it was cheaper and easier to administer than a private company ((Pty) Ltd). Despite its success, the CC could not have more than 10 members.

In the past, companies used to have many regulations and requirements that made the entity difficult for small businesses to manage. 

These extra requirements made the close corporation a much more attractive business.

However, the new Companies Act does not allow new close corporations to be registered anymore, but close corporations that already exist remain valid. The Companies Act permits CC’s to convert to a company, which process, dependant on the business type, may be advisable.

  1. Public Companies

A public company is a company that may offer its shares to the public, but is restricted in its right to make pre-emptive share offers.

Public companies must have at least three directors.

Only public companies may be listed on the Johannesburg Securities Exchange.

  1. Private Companies

Private companies are defined as (in terms of the Companies Act) as those companies whose articles of association restrict the transferability of shares and prevent the public at large from subscribing to them.

This is the basic criterion that differentiates private companies from public companies.

Further, a private company must at least have one director.

  1. Non- Profit Companies

A non-profit company is a company incorporated for one or more objects, either a public benefit or an object relating to cultural or social activities, or communal or group interests.

A non-profit company may be incorporated with or without members. It must at all times have at least three directors, however.

Should you find yourself needing assistance in the registration of a company or need guidance in the pros and cons of the various entities and legislation relating thereto, our office is available to provide you with expedient assistance.

We understand that there are many private companies that assist in the company registration process, however, advocate registration by an Attorney, in order to ensure legal compliance.