Types of business entities based on the Companies Act, 2008
A new Companies Act was promulgated in 2008. The Act, Amendment Act together with the Regulations completely replaces the Companies Act of 1973 however, existing companies registered under the 1973 Act will continue in existence. The Act came into operation on 1 May 2011.
The Act provides for two categories of companies, namely for profit and not for profit companies.
Close corporations continue to exist but no new close corporations can be registered post the implementation date of the new Companies Act, being 1 May 2011.
For profit companies
Not for profit companies
Annual financial statements
Public interest score
Every company must calculate its public interest score for each financial year.
This is determined as the sum of:
An “external company” is defined as a foreign company that is carrying on business, or non-profit activities, as the case may be, within South Africa, if such a company is party to one or more employment contracts within South Africa, or is engaging in a course or pattern of activities within South Africa over a period of at least six months, which would lead a person to reasonably conclude that the company intended to continually engage in business or non-profit activities within South Africa.
An “external company” must register with the Commission within 20 business days after it first begins to conduct business, or non-profit activities, as the case may be, within South Africa.
The following must accompany Form CoR 20.1 during the registration process:
A “domesticated company” is defined as a foreign company whose registration has been transferred to South Africa and which will thereafter exists as a company in terms of this Companies Act as if it had been originally so incorporated and registered.
Notes to editors
You may quote freely from this publication, provided you acknowledge the source. This publication is an outline for information purposes and should not be relied upon for detailed planning. Readers are advised to consult professional advisors for guidance relating to new or existing legislation which might affect their business and personal decisions.
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