Recently many changes in the laws for South African Companies have occurred. This page is continuously updated to ensure that you can stay up date on the Companies Law of South Africa. Read the full Companies Act of 2008
Why the change?
During April 2011 the new Companies Act, No. 71 of 2008 became effective and replaced the previous of 1973. The effect of this for Small and Medium Enterprises (SMME’s) has been as follow:
- CC Members has been replaced with Company Directors.
- Internationalised: It has been drafted in accordance to international best practices.
- Less forms: Only one form, namely the Memorandum of Incorporation (MOI), is required to start trading formally.
- Custom businesses: Each Company can easily make regulatory provisions and governance rules as it wants to.
- Less financial procedures: Auditors or secretaries are not required under the law.
- Business Rescue: The business rescue concept is now formalised and broadened.
What does this mean for you as an SMME?
- All business which wants to trade formally needs an MOI.
- You will thus need to register your new Company as a Private Company which name will end with PTY Ltd (replacing the previous Private Company and Closed Corporation / CC company structures).
- You are not required to have an auditor. It is optional.
- You are required to lodge an annual return at the end of each year. You will be penalised and even de-registered otherwise.
- You can reserve a Company Name for 6 months during which you need to register a new Company to formally own the Company Name.
- To start (incorporate) your Company, one or more ‘Founding Directors’ are required.
- To amend the MOI (with more than one stakeholder) :
- the shareholders needs to be informed of this meeting 10 working days in advance.
- shareholders can make a decision as long as shareholders with more than 75% stake in the Company are present.
- Company records (written – including electronically) must be stored for a minimum of 7 years.
- Financial statements must:
- Comply with financial reporting standards.
- Be provided to all persons who hold beneficial interest in the Company.