More Pty Info

There are two different sections of companies in South Africa, namely:registerclosecorporation1

a) Profit Companies

b) Non Profit Companies

More information on the above-mentioned companies follow:

a) Profit Company

A business that produces a profit

Profit companies are divided into these four sections:

  1. A Pty Company (Private Company)
  2. A Public Company
  3. A Sole Proprietor
  4. A Partnership

 

Definitions and features of profit companies:

1. Pty Company

Definition: A Pty company is the opposite of a state owned company. It cannot offer any of its securities to the public according to the MOI (Memorandum Of Incorporation), and the transfer-ability of its securities are also not allowed.

Features:

  • A minimum of one director is needed.
  • One or more incorporator can start a Pty company.
  • A Pty company does not need to register a company secretary, audit committee or an auditor.
  • A Pty company’s financial statements has to be independently reviewed, but auditing of its statements are not necessary.
  • Shareholders have the right to issue new shares by the company.
  • A Pty company can operate as a large company or a small company.
  • In the Companies Act of 2008 only the directors that were directly involved in an action against the law, can be held responsible.

2. Public Company

Definition: A company whose shares are traded freely on a stock exchange. It is more restrictive than a Pty company.

Features:

  • The board of Directors must consist of three Directors.
  • An audit committee, auditor and company secretary have to be appointed by the Public company.
  • An ethics and social committee have to be appointed.
  • All its financial statements have to be audited.
  • A Public company can consist of any number of shareholders.
  • A Public company has to have an annual meeting with all the shareholders present.
  • The Public company’s shareholders have no pre-emptive rights over new shares being issued.

3. A Sole Proprietor

Definition: It’s a business where there is no distinction between the owner and business.

Features:

  • You are your company’s only resource.
  • Creditors are more likely to extend credit, although some problems can occur due to unlimited liability for company debt.
  • Creditors might take the owners possessions to settle outstanding accounts.
  • In the case of the owner’s death, some problems can arise due to the fact that the new owner must take responsibility for everything.
  • The owner receives all the profit.
  • Time flexibility

4. A Partnership

Definition: A business between two or more individuals who share in the management and the profit.

Features:

  • Both of the partners will take responsibility for each other.
  • All of the owners are responsible for the business’ debt.
  • The incorporators can decide on the amount of shares given to each partner.
  • A Partnership can be initiated easily and without big investments.
  • A Partnership can offer some favourable tax breaks.

b) Non Profit Company

These are called NPO’s and can only be registered directly with CIPC.