The Basics Of Registering A New Company in South Africa

A lot of our members based in South Africa have been inquiring about company registrations. We welcome the need to register your companies, great move that will benefit you in the long run. Banks or funders generally prefer to work with  registered companies. So if you are looking forward to growth then consider becoming professional and registering your company. An extra advantage is that one can now do the registration online!

Below we feature an article compiled by the Entrepreneur Magazine and share it with our South African members or Zimbabweans in South Africa interested in registering their businesses.

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 their companies.

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 non-profit and profit companies. Each of the different business entities under these categories has specific requirements in terms of the documentation that is required.

1Types of entities

Non-profit companies:

• 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:

• 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’.

State-owned companies:

• 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’

Public companies:

• 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.

Private companies:

• 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’.

2Documentation

A company is incorporated by the lodging of a Notice of Incorporation (CoR 14.1) and Memorandum of Incorporation (CoR 15.1 A-E). These forms are available for download from the CIPC’s website.

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

Supporting Documents:

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

Fees: The basic filing fee is R175. According to Elsabie Conradie, head: Communication, marketing and stakeholder relations for CIPC, a private company can be registered within one day if the company registers without reserving a name first.

3Register online

The CIPC’s website allows business owners to register their companies online. Once you are ± registered as a CIPC customer you will be able to access the transactional website. After you have logged in, look for the ‘New Companies’ link under the ‘Companies’ tab.

Credit:Entrepreneur