CIPC has stopped the registration of all Close Corporations (CC’s) in 2009. Up to 2009 you could register a CC or a Private Company (Pty) Ltd, but under the Companies Act of 2008 these two company formats were ‘merged’ and the Pty Company format have been used by new companies ever since.
If you have a Close Corporation (CC) in South Africa, you have two choices:
1. Keep it ‘as is’. According to the current law (Companies Act of 2008), CC’s will continue to exist in its current form for the time being. Note that there are new requirements with which you need to stay up to date.
2. Convert your CC to a Private Company (Pty). This is definitely the safest option as the Companies Act correspond 100% with the Pty’s documentation. Also, to gain the Advantages which are included in the latest Company Act for Private Companies, it could be a smart move to convert your current CC to a Private Company.
Main Advantages to convert your CC to a PTY Company
1. Share liquidity: Your company owners will now become shareholders and each will receive a certain amount of shares. This allows the company to get new investors / trade with their shares in the company very easily.
2. Imports and Exports: If your company deals with any international clients, a CC will not be recognised as a Company format most of the time. In this case it is best to convert your CC to a Pty soonest.
What will happen if I choose to convert my CC to a Pty?
1. Your company will now have the words ‘Pty (Ltd)‘ at the end of its name instead of ‘CC’.
2. The current members will become the Company Directors. Each Director will have a number of shares in the PTY Company.
3. You will receive Company Documents in accordance with the latest Companies Act of 2008, as per below:
- COR14.3: Company Registration Certificate (used to be CK1 document for CC’s).
- COR14.1 and CoR14.1A: Appointment of Directors forms.
- COR15.1A: The Memorandum of Incorporation (MOI) – CIPC’s recommended short format version. If you want your own Custom MOI or the Long MOI, please specify.
To convert your CC to a Pty, please complete the application form below. We will contact you soonest.
Cost: R 1 490
Timeframe: 20 – 40 working days