THE SOUTH AFRICAN COMPANY
There are two types of Private Limited Liability entities in South Africa, the Close
Corporation (CC) and a Private Company (PTY).
PRIVATE COMPANY:
TAXATION
The rate of taxation is 35% on South African source income only.
SHAREHOLDERS
A minimum of one shareholder is required whose details are filed on the public
register. Corporate shareholders are permitted and anonymity can be achieved by the use of
nominee shareholders. Membership is limited to a maximum of 50 shareholders.
DIRECTORS
A minimum of one director is required and full details of these must be filed with the
Public Registry. An annual general meeting must be held within 18 months after the
company’s incorporation. Subsequent annual general meetings are to be held not later
than 9 months after the end of each ensuing accounting date (the end of the Financial
Year) but still within 15 months of the date of the preceding annual general meeting.
ANNUAL REPORTING
South African companies are required to file full audited accounts and must also
prepare and file an annual return which gives details of the current directors and of the
shareholders who have held shares in the company at any time during the year.
TIMESCALE
Incorporation of a South African company takes around 3 weeks but ready-made companies
are available for immediate purchase.
RESTRICTIONS ON NAME AND ACTIVITY
There are restrictions on the use of certain words in the name of a company. Specific
permission has to be obtained prior to incorporating the company. Words which are deemed
to be 'undesirable' or which are 'calculated to deceive or mislead the public' are
prohibited.
LOCAL REQUIREMENTS
As a matter of local company law the company MUST maintain a registered office address
within the jurisdiction of incorporation and must also appoint an auditor.
CLOSE CORPORATION:
A Close Corporation is governed by the Close Corporations Act of 1984. The Close
Corporation provides a simpler and less expensive corporate form for the single
entrepreneur or a few participants (who must be natural persons). The name of a Close
Corporation ends with the words "Close Corporation" or "CC". A Close
Corporation has the following characteristics:
JURISTIC PERSON
The CC is a juristic person distinct from its members; it consequently enjoys perpetual
succession and its members have limited liability in respect of the Corporation’s
debts.
TAXATION
The rate of taxation is 35% on South African source income only.
SHAREHOLDERS
There are no shareholders. Instead there are members who have a percentage interest in
the entity. There is a minimum of one member and a maximum of ten. Companies cannot be
members of a CC. There is no register of members however, details of the members are found
in the Founding Statement.
DIRECTORS
There are no directors. Instead there are members who are in a similar position to
directors of a company i.e. members have certain fiduciary duties towards the Corporation.
There is a minimum of one member and a maximum of ten. Companies cannot be members of a
CC. There is no register of members however, details of the members are found in the
Founding Statement.
ANNUAL REPORTING
There is no requirement to file audited accounts, however, annual financial statements
must be prepared by the Corporation’s "accounting officer" who need not be
a qualified Chartered Accountant.
TIMESCALE
Incorporation of a Close Corporation takes around 3 weeks but CC’s are available
for immediate purchase.
RESTRICTIONS ON NAME AND ACTIVITY
There are restrictions on the use of certain words in the name of a company. Specific
permission has to be obtained prior to incorporating the company. Words which are deemed
to be 'undesirable' or which are 'calculated to deceive or mislead the public' are
prohibited.
LOCAL REQUIREMENTS
As a matter of local company law the company MUST maintain a registered office address
within the jurisdiction of incorporation and must also appoint an accounting officer.
