In South Africa, founding a company can be comparatively swift, unproblematic and affordable. IMCOSA provides assistance with choosing the appropriate legal vehicle and performs the registration, including name reservation and registration of shareholders and directors. The following entities are available:

Close corporation (cc)

• Limited liability of members
• Members can only be natural persons
• Affordable to purchase and maintain, less regulated
• Suitable for Start-Ups and small to medium enterprises

Proprietary Limited (Pty) Ltd)

• Limited liability of shareholders
• Shareholders can be natural or juristic persons
• Recognized vehicle for medium to large enterprises

Sole Proprietorship

Partnership (based on a partnership agreement)

Public Company

Suitable for listing on the stock exchange

External Company

local branch/subsidiary of foreign company

Trust

for profit or not-for-profit

Company Incorporated in terms of Section 21

not-for-profit

Please note:

A new Companies Act (No. 71 of 2008) was signed into law in April 2009. The Act is expected to come into operation during the second half of 2010. The new Companies Act will change the way companies are incorporated and regulated. The new Companies Act distinguishes between: 1) non-profit companies, 2) for-profit companies, 3) state-owned companies and 4) external companies. For-profit companies are divided into a) Public companies (Ltd) and b) Private companies with limited liability (Pty) Ltd and c) Personal liability companies (Inc/Incorporated). The legislative changes will see the close corporation (cc) fall away and it will not be possible to register close corporations or convert other companies to close corporations anymore.

The aims of the changes are simplification, increased flexibility, corporate efficiency, transparency and predictability. Whether this is achieved remains to be seen, especially since certain elements of the new laws are controversial and have been widely criticized.

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