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 a company.
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.
Registering your company
The Companies Act provides for two categories of companies, namely:
2. Profit companies.
Each of the different business entities under these categories has specific requirements in terms of the documentation that is required for company registration.
The following article refers to these elements of registering your company:
1. Types of entities
2. Documentation required
1. Types of entities
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 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’.
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’
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.
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’.
2. Documentation A company is incorporated by the lodging of a Notice of Incorporation (CoR 14.1) and Memorandum of Incorporation (CoR 15.1 A-E).
Memorandum of Incorporation
The Memorandum of Incorporation (MoI) contains the following information:
1. Details of incorporators
2. Number of directors or alternate directors
3. Share capital (maximum issued).
Notice of Incorporation
The Notice of Incorporation, which is lodged with the MoI, contains the following information:
1. Type of company
2. Incorporation date
3. Financial year-end
4. Registered address (main office)
5. Number of directors
6. Company name
7. Whether the company name will be the registration number
8. The reserved name and reservation number
9. List of four names to be checked by the Commission.
To register a private company you will complete either a CoR 15.1A (for a standard private company) or a CoR 15.1B (for a customised private company) and a CoR 14.1. The supporting documents required include:
Certified ID copies of all indicated initial directors and incorporators
Certified ID copy of applicant if not the same as one of the indicated initial directors or incorporators
If an incorporator is a juristic person, a power of attorney is required for the representative authorised to incorporate the company and sign all related documents
If another person incorporates the company and signs all related documents on behalf of any of the incorporators and initial directors, a power of attorney and certified ID copy of the person is required
If a name was reserved before filing of incorporation documents, a valid name reservation document is necessary
10 things you need to know about starting a business in SA – registering your company
South Africa is alive and buzzing with entrepreneurs, possibly because the country’s high unemployment rate is spurring individuals on to start their own businesses.
But going into business blindly can be daunting. Not knowing the necessary procedures and rules of engagement can get problematic and, even more importantly, cost a bit more than a few initial lessons, says Riki Marais, a manager at accountancy firm Hobbs Sinclair.
Marais shares some of the most common mistakes a start-up can make and the questions you should be asking if you intend to start your own business.
Why do I need to register my company?
Company registration guarantees several legal benefits, one of which is asset protection.
For example, keeping personal assets safe in case of a lawsuit against your company.
“If a company is legally registered, others can’t claim your business name as their own, which is not the case if unregistered”.
Also, registration gives customers an extra reason to put their trust in you. Registration signals that you take your business seriously. And no one wants to transact with a shady business.
Another benefit, says Marais, is that funding is more easily acquired by registered businesses. Banks do not give business loans to unregistered companies, as the risks are too high for them. Similarly, investors will only put money into a business which they feel has great potential. Not being registered will likely count against you.
How and where do I register my company?
We, JCS, can register your business online with Companies and Intellectual Property Commission (CIPC).