Businesses that wish to transact with government and the formal sector, or that wish to access certain types of government support, are generally required to be registered with the CIPC (Companies and Intellectual Properties Commision). For these businesses, there may also be tax benefits to registration, as registered businesses have a lower tax rate than individuals. Even though you may not be registered with the CIPC, you will still have to be registered with the South African Revenue Services and will still be liable for tax if your turnover exceeds the prescribed threshold.
Types of companies:
1. A private company is the most common and simplest form of company to be registered. It is comparable to a close corporation. Close corporations are no longer registered.Private Companies may not offer shares to the public and restrictions are also placed on the transferability of their shares. Private companies must have at least one director and one incorporator. The director and incorporator may be the same person. The word “person” includes a juristic entity. This means that a legal entity or a trust may be an incorporator of a new company. Most private companies are owner managed and tend to have a smaller number of directors.
2. A public company is a company that may offer its shares to the public, but is restricted in its right to make pre-emptive share offers. Public companies must have at least three directors. Only public companies may be listed on the Johannesburg Securities Exchange. Public companies must be audited and must produce audited financial statements which are tabled with their shareholders annually. Depending on the size of the public company, the company may also be required to have an Audit Committee and a Social and Ethics Committee.
3. A non-profit company: is a company incorporated for public benefit or other object relating to one or more cultural or social activities, or communal or group interest.The income and property of a non-profit company is not distributable to its incorporators, members, directors, officers or persons relating to any of them and must be used to advance the purpose for which it was created, as set out in its MOI. A non-profit company must have at least three incorporators and three directors and may be registered with or without members. A non-profit company is not required to have members. The members of a non-profit company are persons who participate in the activities of the non-profit company, such as members of a church or a pension fund. Non-profit companies registered without members, may be registered with a standard or a customized Memorandum of Incorporation (MOI).
Step 1: Complete the attached forms and send them back with the supporting documents:Complete and return the forms stated below and send the below supporting documents:
- Complete and send back the form attached
- ID or Passport copies of all the directors in Company (Clear copies)
- The Proof of Payment for the full amount R750, check below Quote for banking details
- Signed Power of Attorney
Step 2: Name ReservationYou are required to choose 4 proposed names for your business,We will reserve the names that you have chosen and send you the approved name response within 1 to 3 working days.Step 3: Receive your company documents and other certificates: After the lodgment you will receive your company documents and certificates within 1-2 working days consisting of the following documents:
- Certificate of Incorporation
- Shareholders Certificates
Maintain your Business once it is registeredAnnual ReturnsAll companies (including external companies) and close corporations are required by law to lodge their Annual Returns with CIPC within a certain period of time every year.An Annual Return is a statutory return in terms of the Companies and Close Corporations Acts and therefore MUST be complied with. Failure to do so will result in the Commission assuming that the company and/or close corporation is not doing business or is not intending on doing business in the near future. Non-compliance with annual returns may lead to deregistration, which has the effect that the juristic personality is withdrawn and the company or close corporation ceases to exist.
- Companies have 30 business days from the date that the entity become due to file annual returns before it is in non-compliance with the Companies Act.
- Close Corporations have from the first day of its anniversary month up until the thereafter to file Annual Returns before it is non-compliance with the Close Corporations Act.
- Annual Returns can only be filed electronically.
We at bonmas consulting can assit you with your companies annual returns for as little as R250.Appointment, Resignation or Removal of DirectorsThe memorandum of incorporation (MOI) determines the minimum number of directors and alternate directors, which, in the case of a private company may not be less than one director. A customised MOI will also set out the eligibility requirements for a director as well as the directors’ term of office. In the case of a standard MOI, the term of office is indefinite and there is no restriction on the number of directors. New directors may be elected by the Board of Directors when there is a vacancy or the company wishes to add directors. Vacancies on the board arise if a director:
- resigns or dies
- ceases to hold the office, title or designation in the company that entitles the person to be an ex officio director,
- becomes incapacitated or disqualified or
- is removed.
A director may be removed by:
- An ordinary resolution adopted at a shareholders’ meeting by the persons entitled to exercise voting rights in the election of that director. The director concerned must be given notice of the meeting and the resolution, at least equivalent to that which a shareholder is entitled to receive, regardless of whether the director is a shareholder. The director must be afforded a reasonable opportunity to make a presentation in person or through a representative to the meeting before the resolution is put to a vote.
- A resolution of the board because it has determined that the director in question has become ineligible or disqualified in terms of section 69 of the Act, is unable to perform the functions of a director and is unlikely to regain that capacity within a reasonable time or has neglected or been derelict in the performance of the functions of a director.
- An order of the court confirming the resolution of the board or removing the director from office if the court is satisfied that the director is ineligible or disqualified, incapacitated, or has been negligent or derelict.
A director may be appointed by the Board of Directors, unless the Memorandum requires shareholder approval. Deregistering/Closing your Company
A business can be referred for deregistration upon request from the company or close corporation or any other third party, provided that the company or close corporation has ceased to carry on business; and has no assets or, because of the inadequacy of its assets, there is no reasonable probability of the company or close corporation being liquidated.
Deregistration will also be triggered when two or more successive annual returns are outstanding, in which case the company or close corporation will be automatically referred by the system and then notified by registered mail or alternative electronic methods of communication. The contact details as per the Commission records will be used to communicate the deregistration. If your contact details are outdated or incorrect, the Commission is not liable if you have not received such notification before deregistration.
Companies and close corporations are responsible for informing the Commission of contact details to ensure that they receive relevant notifications and reminders.
To register a company in South Africa Now click here