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Setting
up a South Africa business, (COMPANY FORMATION),
whether as a sole proprietor or forming a closed corporation
or a Pty Ltd, as the vehicle to incorporate your
business are just some of the options open the business
person when forming a company in South Africa. Company formation requires the business owner to consider a number of options and professional advice should always be sort. Please click here to contact our company formation experts Below we provide some useful information on company formation in South Africa. Details of the three most popular types of business structures (sole proprietorships, close corporations and private companies) are detailed in these web pages. Please note that should you require a Section 21 company (non profit company) or are setting up a company which has foreign ownership, the decision and advice process is extremely complex. In this instance it is more essential than ever to seek professional advice. This can be arranged simply by e-mailing us SOLE PROPRIETOR The sole proprietorship is the simplest and most common form of business, conducted by a single individual owner (the “sole proprietor”). Sole proprietors can conduct business under their own name by simply doing business, for example, as “Jane Jones”. A sole proprietor can also do business under a trade name such as “Jane’s Jet Skis” or “Supreme Skis”. A sole proprietorship has no limited liability for the owner, and it is therefore important to note that the business owner’s liability includes his own personal assets. Net profit of the sole proprietorship is viewed as personal income of the business owner and taxed in his personal name according to the income tax tables of South African Income Tax Law. If a sole proprietor operates under a trade name or fictitious name, the sole proprietor is usually required to file a form (a “trade name certificate”) in the city / province where the business is located. A sole proprietorship may have employees and is permitted to carry on most types of businesses. More information is available here at company formation » Sole Proprietorships CLOSED CORPORATIONS What is a close corporation? A close corporation (CC) is similar to a private company as it is a legal entity with its own legal personality, perpetual succession and a tax payer in its own right. The owners of a close corporation are called members. Membership is restricted to natural persons and, under certain conditions, to trusts. Such members do not hold shares but have a member’s interest in the entity. This member’s interest is expressed as a percentage. The minimum number of members is 1 and the maximum number of members allowed is 10. From a taxation perspective, the close corporation is treated in a similar manner as a company. This is a common form of business entity for smaller businesses. Why Register for a CC? Small businesses, whose members have a close relationship and want to start up with simple administration and legal procedures, usually register for a CC. More information is available here at company formation » Closed Corporations PRIVATE COMPANY ((PTY) LIMITED) This business entity is treated by law as a separate legal entity and has to register as a tax payer in its own right. It has a separate life from its owners and is required by the Companies Act No 61 of 1973 to perform rights and duties of its own. The owners of a private company are shareholders. A company may not have an interest in a close corporation. The Act restricts the number of shareholders in a private company to a maximum number of 50. The rights and obligations of the shareholders vis-a-vis each other and vis-a-vis the company are set out in a shareholders agreement. The name of a private company must end with the words '(Proprietary) Limited' or '(Pty) Ltd'. More information is available here at company formation » Private Company ((Pty) Limited) Please click here to contact our company formation experts More information on company formation here More information here on business registration Our other services include: |