Limitation of period to incorporate close corporations or convert. Pdf reflections and perspectives on the south african close. It is important to understand the differences between a private company pty limited and close corporation and the. Close corporation amendment act 8 of 1994 married persons equality act 1 of 1996. The new companies act introduced fundamental changes to south african company law and corporate actions. The liquidation of a company or close corporation timed well, can stop sars in their tracks. To provide for the formation, registration, incorporation, management, control and liquidation of close corporations. Guidelines for corporate law reform may 2004, a policy document developed by. Republic of south africa close corporations act 69 of 1984 cipc. Characteristics of close corporation 1 a close corporation. Close corporations act 69 of 1984 application for relief in terms of s 36 and s 49 first respondent, in effect, hijacking close corporation from applicant applicant establishing case in terms of s 49 oppressive conduct by first respondent preventing applicant from adducing evidence of fair value of members interest for.
Guidelines for corporate law reform may 2004, a policy document developed by the department of. Republic of south africa close corporations act 69 of 1984. South africa must register with the compensation fund pay annual assessment sec 86 report all accidents and or occupational diseases section. Its main function is to address the accounting requirements, financial reporting standards, the duties of an. The companies act audit requirement and other matters. On this page you will find helpful guides such as the saica handbook volume 4, guide on trading whilst factually insolvent, guide on pro forma financial information and many other guides dealing with specific areas and issues. Converting your cc into a company will enable you to invite other parties to invest as. If your close corporation cc has grown bigger and you want to compete with bigger companies in the same market, you can convert it into a company at the companies and intellectual property commission cipc. Section 47 of the close corporations act has been substantially amended and the provisions of the companies act regarding the disqualification of directors will now largely determine who is disqualified from managing a close corporation.
May 01, 2011 a close corporation is a legal entity with its own persona. Close corporation wex us law lii legal information. To provide for the formation, registration, incorporation, management, control and liquidation of. A close corporation is registered in terms of the close. The companies act audit requirement and other matters related. The act was signed by the president on 8 april 2009, but. Pdf on dec 1, 2009, jean du plessis and others published reflections. Existing close corporations would be administered under the close corporations act, 1984 indefinitely. Liquidating of a company or close corporation prinsloo. Close corporations act regulations corporate rebels. The close corporations amendment act, 2005, amended the close corporations act, 1984, with effect from 11 january 2006. On 1 may 2011, the companies act 71 of 2008 came into effect, replacing the companies act 1973 and amending the close corporations act of 1984. Close corporations under the close corporations act, 1984. Please refer to schedule 5 of the new companies act, no.
The purpose of this document is to serve as an overview of some of the key effects of the new companies act on both close corporations as well as companies. As such, it is intended to provide the reader or hisher entity with general information of interest. Close corporation copy of the ck1 and ck2 documents. Limitation of period to incorporate close corporations or convert companies 3. A shelf close corporation is available for purchase. Close corporations administrative regulations 326 kb pdf. A company is a business organisation which earns income by the production or sale of goods or services. Act 1973 and amending the close corporations act of 1984.
Close corporations can be converted to companies, but companies can no longer be converted to close corporations. Understanding the new companies act pwc south africa. Protect the close corporation, its members, and the accounting officer by using our new association agreement. Member guide south african institute of professional. We are the leading resource for freely available legislation in south africa and are used daily by thousands of professionals and industry leaders. Close corporations act 26 of 1988 og 5658 brought into force after namibian independence on 1 march 1994 by proc. This page contains information on the close corporations act no 69 of 1984. Get adobe pdf reader when the seller of immovable property is a company or a close corporation, and the company or close corporation disposes of the whole or the major part of its assets for instance when a company cc having only one asset being its immovable property sells that property remember that compliance with the following. Acts online provides legislation, including amendments and regulations, in an intuitive, online format. Close corporations amendment act 8 of 1994 gg 891 deemed to have come into force on 1 march 1994, except for section 5, 14 and 30. There can be between one and ten members, which must be natural persons. Effect of conversion on legal status schedule 3 amendment of laws a. Existing close corporations can elect to continue to exist until deregistered, dissolved or converted into a private company governed under the new companies act.
With acts you are guaranteed the latest and most up to date resource for your legislative needs. The companies act, 2008 also prohibits the registration of any new close corporation after 1 may 2011. Act 69 of 1984 the act is the provision of a simple, deregulated, decriminalized, inexpensive and flexible. The memorandum of incorporation was introduced in 2008 and has replaced previous legislation that was under the companies act, no 61 of 1973 the old act. A business entity is being bought which is a close corporation. The act, amendment act together with the regulations completely replace the companies act of 1973. We report, as required in terms of section 621 of the close corporations act of south africa, having. They are regulated chiefly by the close corporations act. Please visit the contemporary gazette page for access to a legal database. Often business people still have to decide between a private company pty limited and close corporation. A close corporation cc is the entity usually chosen for smaller businesses. Cipro means the companies and intellectual property registration office that constitutes a combined administrative office for the various registration offices established or deemed to be established under the act, the companies act, 1973 act 61 of 1973, the trademarks act. A close corporation may also be converted into a company.
Amendment of section 1 of act 69 of 1984, as amended by section 1 of act 38 of 1986. A close corporation is a juristic person distinct from its members. A corporation shall, in accordance with the code of practice of the south african. It is a myth that sars and other creditors that the directorsmembers did not sign surety for can hold a directormember personally liable for the debt of the company or. This study focuses mainly on companies and briefly on close corporations although the latter are being phased out by the new south african companies act.
No new close corporations may be formed once that act comes into operation during 2010. With the new companies act, the option of a close corporation has fallen away. Report of the accounting officer to abc close corporation. The new companies act of 2008 what about close corporations. Convert close corporation to a company south african. The close corporations act, 1984 has been amended as provided for in schedule 5. The memorandum of association which was the founding document of a company. Amendments to close corporations act definitions 2. The purpose of the south african close corporations. The provisions of the companies act in respect of business.
For guidance, the developers looked to south african company law for the 21st century. The south african close corporations act 69 of 1984 cca is a. In terms of sections 59 and 62 a close corporation must appoint an accounting officer to. A close corporation does not have shareholders but members. These amendments provide for the introduction two important new principles, which will have an effect on the procedures to be followed for the registration of founding statements form ck 1 and amended founding statements forms ck 2 and ck 2a. Close corporations act 26 of 1988 legal assistance centre. The main provisions of the close corporations act are summarised but this guide does not cover all the administrative details of a close corporation. Effect of conversion of close corporation into company rohib i tio nf as soc a pne sh exc edi g we.
Since 1 may 2011, it has been impossible to incorporate a new close corporation in south africa. Disposal of the whole or greater part of the assets of a. The new companies act introduced fundamental changes to. Follow the links below to view and download the guides you require. The terms close corporation and closely held corporation will be considered to be synonymous and will be used interchangeably. Sections 56 and 58 of the act provide that all close corporations are required to keep accounting records and prepare annual financial statements. In terms of the new companies act, 2008 no new close corporations may be registered, and existing close corporations may convert to a company at no conversion fee up to 30 april 2014 there is no legal obligation to convert a close corporation to a. To have its own persona means that, although it is not an individual person, it can act as if it is a person and certain rights and obligations are conferred to it, seperate from its members, from the moment it is registered. Close corporations act, 1984 cc regulations regulations as amended cipc close corporation administrative companies and intellectual property commission close corporation as defined in the act code of professional conduct code of the south african institute of chartered accountants. Registration and incorporation of companies in south west africa proclamation, no.
Characteristics of close corporation 1 a close corporation is. Shareholders agreements in close corporations and their. Act, may form a close corporation and secure its incorporation by complying with the requirements of this act in respect of the registration of its founding statement referred to in section 12. Close corporations act, no 69 of 1984 legal legal and.
We report, as required in terms of section 621 of the. Here are some of the differences but we suggest that you seek professional advice before deciding. Close corporations under the close corporations act, 1984 i, kent diederich skelton durr, deputy minister of trade and industry, hereby, on behalf of the minister of trade and industry, by virtue of the powers vested in him by section 10 of the close corporations act, 1984 act 69 of 1984, make the regulations contained in the schedule. One of the effects of the new companies act of 2008 is the phasing out of close corporations. New association agreement for close corporations memorandum. Compensation for occupational injuries and diseases act no. Be it enacted by the parliament of the republic of south africa, as follows. South african company law is that body of rules which regulates corporations formed under the companies act. The south african close corporation under the companies act of 2008.
Ccs can be startups or a mature businesses with a maximum of 10 members. Under the new act, close corporations are treated a lot more like companies 2. Convert close corporation to a company south african government. Act means the close corporations act, 1984 act 69 of 1984. Together with the king 111 code and report implemented on. Please note that most acts are published in english and another south african official language. Convert close corporation to a company if your close corporation cc has grown bigger and you want to compete with bigger companies in the same market, you can convert it into a company at the companies and intellectual property commission cipc. Together with the king 111 code and report implemented on 1 march 2010 this is the most fundamental. Accordingly, we do not imply or express an opinion or any other form of assurance on the annual financial statements. Disposal of the whole or greater part of the assets. Act to provide for the formation, registration incorporation, management, control and liquidation of close corporations.
May 15, 2017 a close corporation may also be converted into a company. Republic of south africa close corporations act 69 of 1984 to provide for the formation, registration, incorporation, management, control and liquidation of close corporations. In terms of the new companies act, 2008 no new close corporations may be registered, and existing close corporations may convert to a company at no conversion fee up to 30 april 2014. Converting your cc into a company will enable you to invite other parties to invest as shareholders in.
The close corporation election is made at the state level, and state laws vary with respect to the eligibility of close corporation status and. Many customers want to know what the difference is between a private company pty and a close corporation cc. Liability a close corporation allows the shareholders to act as would a general partnership in daytoday operations, however if the shareholders step in to run the company, they retain limited liability as shareholders, but take on the fiduciary duties of directors. A close corporation is also commonly referred to as a closely held corporation. There are, however, still hundreds of thousands of close corporations in existence. A close corporation is subject to close corporations act 69 of 1984 and the companies act 71 of 2008. This entry also covers rules by which partnerships and trusts are governed in south africa, together with albeit in less detail cooperatives and sole. See infra chapter ii section b of this document for the concept of close corporation.
1020 754 873 1062 1274 630 21 1325 66 909 69 940 1285 1227 898 104 94 1328 958 1291 1171 860 763 24 744 991 172 1101 435 513 396