Setting up a Business in South Africa

Overview by Globlatrade.net:

Legal Forms of Companies

Types of Companies and Capital (Max/Min) Number of Partners/Shareholders and Liability Registration Fees
Private Limited Company
 
 
No legal limit
Minimum number is 1; while as the maximum number is 50.
 
 
Liability limited to the amount contributed.
Registration fee of ZAR 350 plus ZAR 5 per ZAR 1,200 of nominal share capital (or part thereof).
Public Limited Company .
 
 
No legal limit
Minimum number is 7; while as there is no limit on the maximum number of members/shareholders.
 
 
The liability of a member is limited to the face value of the shares he owns
Registration fee of ZAR 350 plus ZAR 5 per ZAR 1,200 of nominal share capital (or part thereof).
Close Corporation
 
 
No minimum capital.
1 partner
 
 
Liability is limited to the amount contributed.
Registration fee of ZAR 350
Partnership
 
 
No minimum capital.
Minimum 2; Maximum 20 partners.
 
 
Liabiltity of the active partners is unlimited. Liability of the sleeping partner is limited to the amount contributed.
Registration fee of ZAR 350 plus ZAR 5 per ZAR 1,200 of nominal share capital (or part thereof).
 
 

Business Setup Procedures

Administrative Formalities
Registration of an external company is effected by lodging the following documents with the Registrar of Companies within 21days after the establishment of a place of business:

 

1. a certified copy of the memorandum of association of the company,

2. a notice of the registered office and postal address of the company;

3. the consent of, and the name and address of, the auditor of the company in South Africa;

4. a notice of the name and address of the person resident in South Africa who is authorised by the company to accept, on the company's behalf, all service of processes and notices.

Thereafter, the Registrar will register the company, allocate a registration number to the company concerned and issue a certificate of registration to the company. Private companies do not have to lodge their annual financial statements with the Registrar. For details, refer to ‘Register a company

The Competent Organization
Companies and Intellectual Property Registration Office
Time Necessary for Registration
Within 21 days after opening of an office.
 

Recovery Procedures

Principle
The Insolvency Act (which regulates bankruptcy of companies in South Africa), entitles creditors to apply to court for recovery purpose (even if actual insolvency has not been proved).

Certain creditors may be secured, such as the mortgagees of mortgage bonds over immovable property of the insolvent or the holders of book debts/recoverables. Other creditors may have preferred claims, such as the claims of employees for outstanding wages and the revenue authorities for arrear taxes. Creditors without secured or preferred claims are treated as concurrent creditors and only share in whatever excess remains after payment of secured and preferred creditors.

Investors who choose to acquire equity in the company rather than simply loaning money to the company are not regarded as creditors at all and accordingly are unlikely to receive anything. Foreign creditors are treated in the same manner as local creditors.

Minimum Debt-to-Capital Ratio Triggering Liquidation
Not applicable
Bankruptcy Laws
Insolvency Act

Companies Act 1973

More information visit : Department of Justice & Constitutional Development

Reorganization and Rehabilitation Laws
A liquidator is appointed to supervise the winding up of an insolvent company. The liquidator acts according to the directions of creditors who have proved claims, and are also subject to supervision by the Master of the High Court in the applicable jurisdiction. It is also possible for companies to be placed under judicial management if they are in financial difficulty. The purpose is to allow the company to trade itself out of financial difficulty.

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