
Private Company ((Pty) Limited) Comparison To Close Corporation
Below we provide a snapshot of the differences between a Pty Ltd and a Close Corporation. Whilst Close Corporations are no longer available as new business entities it is still worth consideration in the event that:
- A shelf close corporation is available for purchase; or
- A business entity is being bought which is a close corporation.
Often business people still have to decide between a Private Company ((Pty) Limited) and Close Corporation. It is important to understand the differences between a Private Company ((Pty) Limited) and Close Corporation and the table below provides some information in this regard.
Please note that we strongly advise you to seek professional assistance before making your decision.
Private Company | Close Corporation |
Juristic Person | Juristic Person |
Enjoys Perpetual Succession | Enjoys Perpetual Succession |
No maximum shareholding | Can Have A Maximum Of 10 Members |
Companies Can Be Shareholders | Companies Cannot Hold A Member’s Interest |
Comprised Of Directors And Shareholders | Comprised Of Members |
Has A Memorandum of Incorporation | Has A Founding Statement |
May have a shareholders agreement | Articles Of Association Are Not Required |
Compulsory Annual Return To Be Lodged | No Annual Return To Be Lodged |
Has Share Capital | Has Member’s Contributions |
Has An Auditor in certain circumstances | Has An Accounting Officer |
Convenes An Annual General Meeting | Annual General Meeting Not Required |
Certificate Of Incorporation | Certificate Of Incorporation |
Shareholders Hold Shares | Members Hold Member’s Interest |
Can Acquire Its Own Shares Under Certain Circumstances | Can Purchase A Member’s Interest |
Directors Are Responsible For The Day To Day Management Of The Company | Members Are Responsible For The Day To Day Management Of The CC |
Register Of Shareholders | No Register Of Members |
Limited Liability | Limited Liability |
Audited Financial Statements in certain cases | No Financial Statements needed |
Prohibition On A Company To Provide Financial Assistance For The Acquisition Of Its Own Shares | No Prohibition On A CC To Provide Financial Assistance For The Acquisition Of A Member’s Interest |