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WHAT IS A PUBLIC COMPANY?
Public companies are comparable to companies of the same status under the Companies Act, 1973. They are characterised by the following:
- Their MOI permits them to offer shares to the public but restricts limits or negates their right of pre-emption.
- The name of a public company must end with the word “Limited” or its abbreviation, “Ltd”.
- A public company must have at least three directors.
WHAT IS A PRIVATE COMPANY?
Private companies are comparable to companies of the same status under the Companies Act, 1973 and are characterised by the following:
- They are subject to fewer disclosure and transparency requirements.
- A private company will still be prohibited from offering its shares to the public and the transferability of its shares will be restricted, but it may now have more than 50 shareholders.
- The name of a private company must end with the expression “Proprietary Limited” or its abbreviation “(Pty) Ltd”.
- The board of a private company must comprise at least one director, or any other minimum number as stipulated in its MOI. Each incorporator is a first director of the company. (Company Types)
WHAT IS A NON-PROFIT COMPANY?
A non-Profit Company is a company that is incorporated for a public benefit or other object as required by Item 1(1) of Schedule 1 of the Companies Act. Its income and property are not distributable to its incorporators, members, directors, officers or persons related to any of them, except as reasonable compensation for service rendered. Three (3) persons and 3 directors may form an NPC.
- They are incorporated for a “public benefit purpose”.
- Income and property may not be distributed to the incorporators, members, directors or officers of a non-profit company, except for reasonable compensation for services rendered by them.
- The name of a non-profit company will end with “NPC”.
- A minimum of three persons, called incorporators, must complete and sign the MOI.
- A minimum of three directors must be appointed.
- All of a non-profit company’s assets and income must be used to advance its stated objectives, as set out in its MOI.
- Non-profit companies are subject to a varied application of the Act, as set out in section 10.
- A special set out fundamental rules for non-profit companies is set out in Schedule 1 of the Companies Act, 2008.
- According to these rules, the objects of non-profit companies remain subject to the current principles. Furthermore, on their dissolution, non-profit companies are restricted in terms of the distribution of any residual assets. These special rules also include various other matters unique to non-profit companies.
Other Company Types
What is an External Company?
An external company is a foreign company that is carrying on business or non-profit activities within the Republic. It must register with the Companies and Intellectual Property Commission (CIPC) within 20 business days after it first begins to conduct activities within the Republic as an external non-profit company (NPC) or as an external company.
What is an personal liability company?
A personal liability company is comparable to companies contemplated in section 53(b) of the Companies Act, 1973. Its name must end with the word “Incorporated” it meets the criteria for a private company, and its MOI provides that the directors and past directors are jointly and severally liable, together with the company, for any debts and liabilities of the company that were contracted during their respective terms of office..
What is an State-owned Company?
State-owned companies were often incorporated or registered under the Companies Act, 1973 but were not recognised in that Act as requiring separate legislative treatment in respect of certain matters to avoid conflict or overlap with other legislation specifically applicable to them, and not to companies. An SOC is either a company defined as a “state-owned enterprise” in the Public Finance Management Act 1of 1999, or is owned by a municipality as contemplated in the Municipal Systems Act 32 of 2000, and is otherwise similar to an enterprise as referred to above. The name of a state-owned company must end with the expression “SOE Ltd”.