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When registering a company, it is important to consider the type of company required, whether by design or law.  This article provides a short overview of the different types of companies available for registration. 

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Companies can be divided broadly in two groups, profit companies and non – profit companies.  The details of each type of company are set out below: 

 Private Company

• A private company is a company that is not a state – owned company whose shares may not be sold to the public and the transferability of such shares are restricted.
• The name should end with the words “Proprietary Limited” or abbreviated, “(Pty) Ltd.”
• Must have at least one (1) director.
• Generally, financial statements should be independently reviewed and need not be audited. (An audit is required if the company has voluntarily opted to have its financial statements audited.)

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Our commercial law department provides a full range of services related to all aspects of corporate transactions and can assist with the incorporation, registration, and establishment of new companies.  If you have any questions, get in touch with our team today.

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 Public Company

• A public company is a company in which its shares may be sold to the public and listed. (*Note: Listed companies will be subject to additional exchange rules such as the JSE Rules.)
• There are more safeguards imposed by the Companies Act.
• The enhanced accountability and transparency requirements of Chapter 3 of the Companies Act apply to it.
• Must appoint a company secretary, audit committee and independent auditor.
• Must file a copy of its annual financial statements with its annual return.
• Listed public companies must appoint a social and ethics committee.
• The name should end with the words “Limited” or abbreviated, “Ltd.”
• Must have at least three (3) directors. (*Note: the mandatory audit committee requirement will require that a public company also has at least three (3) independent directors.)

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 Personal Liability Company

• A personal liability company is a private company whose Memorandum of Incorporation (MOI) states that it is a personal liability company.
• Directors are jointly and severally liable (with the company) for the debts and liabilities of the company.
• The name should end with the words “Incorporated” or abbreviated, “Inc.”
• This type of company is most often used by professionals such as attorneys, doctors, accountants, quantity surveyors etc.
• Must have at least one (1) director

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 State Owned Company

• A state – owned company is a company that is:
  • Listed as a public entity in Schedule 2 or 3 of the Public Finance Management Act 1 of 199; or
  • is owned by a municipality.
• Subject to exemptions or inconsistencies with the Public Finance Management Act, state – owned companies must comply with the same provisions of the Companies Act as public companies.
• The name should end with the expression “SOC Ltd.”

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Non – Profit Company

• • • A non – profit company is a company that is incorporated for public benefit or an object relating to a cultural or social activity.
    • The income and property of a non – profit company must not be distributed to its founders, members, directors etc.
    • The name should end with the expression “NPC.”
    • Must be formed by at least three (3) persons acting as incorporators.
    • Special rules for non – profit companies are set out in Schedule 1 of the Companies Act.
    • Its annual financial statements require only an independent review. (An audit is required if the company has voluntarily opted to have its financial statements audited.)

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