The new Companies Act of 2008
came into operation on the 1st of May 2011 and replaced the Companies Act of 1973. Take note of the following important
- No new close corporations will be registered but new companies can be registered. For more information on
New Company registrations
- No company conversions to close corporations will be registered.
- Provision has also been made for close corporations to
convert to companies without any payment in terms of the New Companies
- Any future changes to a close corporation would still have to be made in terms of the Close Corporations Act for the following:
- CC amendments (CK2/CK2A)
- Letter for accounting officer resignations
- Liabilities exceed assets letters
- Annual returns
The following processes are administered in terms of the new Companies Act of 2008:
- Name Reservations
- Restoration – normal restorations and annual returns
Types of different Companies, Companies Act 2008
Two types of companies may be incorporated under the Act, namely non-profit companies and profit companies.
Profit companies may be incorporated under the following types:
- Private Companies
- Public Companies
- Personal Liability Companies
- State Owned Companies
Non-profit Companies (NPC)
- A company incorporated for public benefit or other object
relating to one or more cultural or social activities, or communal or
group interests; and
- The income and property of which are not distributable to
its incorporators, members, directors, officers or persons related to
any of them.
Private Companies (Pty) Ltd
Private companies under the new Act are prohibited to offer
securities to the public and the transferability of their shares are
also restricted. Private companies however, are no longer limited to 50
members as was the case under the current Companies Act.
Public Companies (Ltd)
The definition of a public company is largely unchanged. The
only difference is that a public company under the new Act only requires
one member for incorporation compared to the 7 members under the
current companies Act.
Personal Liability Companies (Inc)
The directors and past directors (where applicable) of such
companies are jointly and severally liable together with the company for
any debts and liabilities arising during their periods of office.
State-Owned Companies (SOC Ltd)
A State owned company is either a company defined as a
“state-owned enterprise” in the Public Finance Management Act 1 of 1999
or a company owned by a municipality. The majority of the provisions of a
public company will apply to state-owned companies as well.
Foreign and External Companies
A foreign company is a company incorporated outside of South
Africa , irrespective of whether it is a profit or non-profit company or
carrying on business in South Africa or not. A foreign company is
prohibited from offering securities to the South African public unless
it follows the specific provisions of the companies Act, relating to
offers to the public.
A foreign company is required to register as en “external
company” with the CIPC if it conducts or intends to conduct business in
South Africa. The Companies Act
in terms of Sect 23 lists a series of activities which will be regarded
as conducting business. This list is much broader than the provision
in the 1973 Companies Act relating to a “place of business” in South