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.
There are five types of companies that you can register. If you wish to run a franchise business, you would register a private company. If you wish to register a church, you would register a non-profit company. A private school could be registered as a private company or non-profit company, depending on its objectives. An association of professionals such as lawyers, doctors, civil engineers etc., may be registered as a personal liability company.
For the purposes of this article, we will look at how to register a private company (a (Pty) Ltd), which is the most common and simplest form of company to be registered.
In terms of the Companies Act, 2008, a company may be registered with or without a company name. When a company is registered without a reserved name, its registration number automatically becomes the company name. This is the quickest way to register a company.
Such a company may transact with a trading (business) name, or may apply to add a reserved name at a later stage. In this case, the company will need to first reserve a name and then apply for a name change, which constitutes a change to its Memorandum of Incorporation (MOI) (refer to Maintain a Business).
If your initial name reservation application is not approved, you will need to apply for new names. You may apply for between 1 and 4 names during each application process. Each name reservation application costs R50. A company registration may vary between R125 and R475 (R125 for a private company, R475 for a non-profit company registered without members).
Registering a company with a standard MOI
Private Companies may not offer shares to the public and restrictions are also placed on the transferability of their shares. Private companies must have at least one director and one incorporator. The director and incorporator may be the same person.
The word “person” includes a juristic entity. This means that a legal entity or a trust may be an incorporator of a new company. Most private companies are owner managed and tend to have a smaller number of directors.
All companies must have a Memorandum of Incorporation (MOI) which sets out the rules agreed by the shareholders for the management and maintenance of the business. Private companies may be registered with a standard or a customised MOI.
The standard MOI is provided by law and is integrated into the company registration process. A customised or non-standard MOI allows shareholders to impose certain conditions or waive certain requirements, such as an audit requirement. Such MOIs must be attached to the applications and may require the assistance of a legally qualified person or someone with company secretarial knowledge. At present, private companies with customised MOIs can only be registered manually.
A Private Company with a standard MOI may be registered on-line on the CIPC website, at a self-service terminal or through a collaborating bank, such as FNB.
A company is incorporated by the lodging of a Notice of Incorporation (CoR 14.1) and Memorandum of Incorporation (CoR 15.1 A-E).
Memorandum of Incorporation: The Memorandum of Incorporation (MoI) contains the following information:
- Details of incorporators
- Number of directors or alternate directors
- Share capital (maximum issued)
Notice of Incorporation: The Notice of Incorporation, which is lodged with the MoI, contains the following information:
- Type of company
- Incorporation date
- Financial year-end
- Registered address (main office)
- Number of directors
- Company name
- Whether the company name will be the registration number
- The reserved name and reservation number
- 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
For more information on how to register a company, examples of Memorandums of Incorporation and to register your company online, go to the CIPC website.
Copyright © 2016 Business Partners Ltd. All rights reserved.