Close Corporation (South Africa)
A Close Corporation (CC) is a type of company that exists in South Africa . It was introduced in 1984 by the then government to enable smaller companies to set up a cheap, limited liability company which is a separate legal entity .
Formation of a Close Corporation
At least one person is required to set up a Close Corporation. The owners (partners) must not exceed a total of ten partners. The limited number underlines the purpose of this type of company as an alternative for small businesses. Only natural persons are permitted as shareholders. The Close Corporation is registered with the so-called Registrar of Close Corporations . First, the name is reserved (CK7), as each name of a CC must be unique.
A founding act, also known as CK1, is drafted and signed by the shareholders. It contains the following points:
- The name of the CC
- This must have the ending CC (or the Afrikaanse BK for Beslote corporasia). It is also possible to give the name in all eleven national languages of South Africa .
- The business area in which the Close Corporation operates.
- The physical address of the company and the postal address.
- The names, addresses and identity card numbers of the shareholders.
- The stake in the company that each member owns must be expressed as a percentage.
- The contributions of the members, which can either be in financial form, but also services, buildings etc. are accepted.
- The balance year.
- The name and address of the accountant- designate .
This act is also sent to the Registrar of Close Corporations , who then issues a Certificate of Incorporation , if necessary , which allows the company to operate.
membership
The number of shareholders must not exceed ten. Furthermore, only natural persons can . The ownership of the individual members is recorded as a percentage and a Certificate of Members' Interest is drawn up for each partner, which indicates the respective company ownership.
