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cc to Company Conversion

With the new Companies Act the option of a Close Corporation has fallen away.  You can however convert you cc to a Pty .

Here are some of the differences and advantages but we suggest that you seek professional advice before deciding.

What is a Pty Ltd company in South Africa?

A Private Company (Pty limited) is treated by South African law as a separate legal entity and has to register as a tax payer in its own right. A Private Company has a separate life from its owners and is required by the The Companies Act, No 71 of 2008 to perform rights and duties of its own.

What is a close corporation?

A close corporation is a corporation that is exempt from a number of the formal rules usually governing corporations. Due to the small number of shareholders it has, a close corporation can generally be run directly by the shareholders (without a formal board of directors and without a formal annual meeting).

In summary:

cc Pty
Maximum of 10 members Maximum of 50 shareholders
Companies can not be members Companies can be shareholders
Members contribution Share Capital
Accounting Officer Auditor (Chartered Accountant)*
28% tax rate 28% tax rate
No annual return needed Compulsory annual return to be lodged
Limited liability Limited liability
No AGM required Must convene an AGM

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