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Home > South Africa > Incorporation Of Company
Incorporation Of Company South Africa
INCORPORATION OF COMPANY IN SOUTH AFRICA
 
Law relating to incorporation of companies in South Africa is governed by Companies Act, 1973 as amended from time to time. As per the law of South Africa there may be two types of limited liability company are possible in South Africa: public companies and private companies. The act prescribes the procedures to be followed to form a private or public company.
 
The Companies Act allows any private company to provide in its memorandum of association that the directors together with the company are jointly and severally liable for all debts and liabilities of the company incurred during their term of office.
 
Certain professional persons, such as attorneys and accountants, who are statutorily prevented from forming private companies may incorporate a section 53(b) company to regulate their affairs. These companies are identified by the word "Incorporated" or "Inc." after the name of the company.
 
PROCEDURE FOR INCORPORATION OF COMPANY
 
Any seven or more persons incase of a public company or where the company to be formed is a private company, any two or more persons associated for any lawful purpose or may form a company having a share capital or a company limited by guarantee. A private company may also be formed with a single member, any one person for any lawful purpose. The company can secure its incorporation by complying with the requirements of this Act in respect of the registration of the memorandum and articles.
 
NAME RESERVATION
 
The Registrar shall on written application of the applicant on the prescribed form and on payment of the prescribed fee for each such written application form lodged, reserve a name (approved by the registrar), literal translation into not more than one other official language of the Republic of a name of a company or a shortened form of the name or name so translated of a company.
 
Such reservation is valid prior to registration for a period not exceeding two months or such extended period, not exceeding in all three months, as the Registrar, upon payment of the prescribed fee, may in the special circumstances of any case allow.
 
The name of a public company having a share capital includes, as its last word, the word "Limited" and the name of a private company having a share capital shall include as its last two words, the words "(Proprietary) Limited";
 
The name of a company limited by guarantee shall include-
  1. the word "Limited" as its last word; and
  2. the statement "(Limited by Guarantee)" subjoined to the said name.

REGISTRATION OF MEMORANDUM AND ARTICLES

The memorandum of a company shall state the purpose, for which a company is to be formed and incorporated, describing the main business which the company is to carry on, in addition thereto:
  1. the name of the company;
  2. the main object of the company, stating the general nature of the main business which it is contemplated the company will be entitled to carry on or the main object which an association not for gain will be entitled to promote;
  3. the specific ancillary objects, if any, which are excluded from the unlimited ancillary objects of the company; and
  4. the specific powers or part of any powers of the company, if any, which are excluded from the plenary powers or the powers set out in

Schedule 2 of the Act.If the company is to have a share capital, the memorandum shall state--

  1. the amount of the share capital with which it is proposed to be registered and the division thereof into shares of a fixed amount; or
  2. the number of shares if the company is to have shares of no par value;
  3. the number of shares which each subscriber undertakes to take up, stated in words opposite his name.
  4. If the company is to be a company limited by guarantee, the memorandum shall state that the liability of the members is limited to the amount that each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member or within one year afterwards, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges and expenses of the winding-up, and for adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount but not less than one Rand.Articles of association

The Articles of Association shall

  1. if a public company, may consist of the articles contained in Table A of Schedule 1 of the Act; and
  2. if a private company, may consist of the articles contained in Table B of Schedule 1 of the Act.
If a memorandum and articles complying with the requirements of this Act together with a copy thereof certified by a notary public as a true copy are lodged with the Registrar and upon payment of the prescribed fee, register such memorandum and articles, place his or her seal on the copy, and endorse thereon the date of registration and the certificate.
 
Upon the registration of the memorandum and articles of a company the Registrar shall allocate a registration number to the company concerned:
 
Provided that the Registrar may change such registration number in order to rectify duplications of such numbers or to achieve any other objective which it is necessary or expedient to achieve for the proper maintenance of the register of companies.
 
CERTIFICATE OF INCORPORATION
 
Upon the registration of the memorandum and articles of a company the Registrar shall endorse thereon a certificate under his hand and seal that the company is incorporated.
 
A certificate of incorporation given by the Registrar in respect of any company shall upon its mere production, in the absence of proof of fraud, be conclusive evidence that all the requirements of this Act in respect of registration and of matters precedent and incidental thereto, have been complied with, and that the company is a company duly incorporated under this Act.
 
Fees for the incorporation of a company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
All Companies
Documents
 
Purpose
 
Fees in Rand
CM5 (in duplicate)
 
Application for reservation of name
R 50.00(Stamped original)
Power of Attorney
 
Authorisation to act on behalf of promoters

CM22 (in duplicate)
 
Notification of situation of registered and postal address

CM29
 
Return containing particulars of directors and officers

CM46
 
Application for certificate to commence business
R 60.00
CM47 (by each director)
Statement by directors regarding adequacy of share capital
CM31 (in duplicate)
 
Consent to act as auditor

 
Company Category
 
1. Company with share capital   CM1, CM2,2A,2B, 2C or 2D   Memorandum of Association   Per value shares: R 350.00 + R 5.00 per 1000 of authorised capital no per value shares: R 5.00 per 1000
2. Company without share capital   CM44B, 44C   Articles of Association
3. Company limited by guarantee, or association incorporated under Section 21   CM3,4,4A, 4B   Certificate of Incorporation and Memorandum of Association
4. Company adopting Table A or B (see Companies Act)   CM44

5. Company not adopting Table A or B (see Companies Act)   CM44A, 44C   



 
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