Since 1 May 2011, the Companies and Intellectual Property Registration Office (CIPRO) ceased to exist and was replaced by the Companies and Intellectual Property Commission (CIPC). The New Companies Act came into being at the same time, changing the way business owners register their companies.  The Act stipulates that no new close corporations (CC) can be registered, but those registered prior to 1 May can continue to operate as CCs.

The Companies Act provides for two categories of companies, namely non-profit and profit companies. Each of the different business entities under these categories has specific requirements in terms of the documentation that is required.

• Non-profit companies: A company incorporated for public benefit or another object relating to one or more cultural or social activities, or communal or group interests. The income and property are not distributable to its incorporators, members, directors, officers or persons related to any of them.
• Profit companies: Profit companies are categorised as companies without restrictions on the transferability of their shares and that do not prohibit offers to the public (larger public companies), and companies that do contain restrictions on the transferability of their shares and that prohibit offers to the public (smaller private companies). They may take one of four different forms: a personal liability company, a state-owned company, a public company and a private company.
• Personal liability companies: The directors and past directors are jointly liable with the company for any debts and liabilities arising during their periods in office. The company name ends with the word ‘incorporated’.
• State-owned companies: This is a company defined as a ‘state-owned enterprise’ or a company owned by a municipality. The names of a state-owned company must end with the expression ‘SOE Ltd’
• Public companies: The definition of a public company is largely unchanged. The only difference is that a public company now only requires one member for incorporation compared to seven members in the past.
• Private companies: While comparable to private companies under the old Act, these are similar to previous close corporations. Some of the changes made to private companies include fewer disclosure and transparency requirements, no longer being limited to 50 shareholders, and a board that must comprise at least one director. The name of a private company must end with the expression ‘Proprietary Limited’ or ‘(Pty) Ltd’.

A company may be registered with or without a company name. When a company is registered without a name, its registration number automatically becomes the company name. Such a company may transact with a trading (business) name, or may apply to add a reserved name at a later stage.

A private company must have at least one (1) director and a non-profit company must have a minimum of three (3) directors. A successful company registration transaction automatically comes with a tax registration number.

For more information on how we can assist you in registering a new company, please email us on enquiries@dbsaccounting.co.za.