Process of registering a company in South Africa

Foreign investors who come to South Africa to invest in factories or trade should register a company. There are three most common forms of registered companies in South Africa. Public Company, Proprietary Company and Close Corporation.

1. Public Company and Private Limited Company:

The number of members of a public company shall not be less than 7 (but this limit does not apply when the company belongs entirely to another public company), and there is no limit on the number of members. A public company must have more than two directors. Once the conditions for listing on the Johannesburg Stock Exchange are met, it can apply for listing.

In its articles of association, a private limited company must specify restrictions on share trading, clearly stipulate that the company's members shall not exceed 50, and prohibit the public from subscribing to the company's shares and bonds. A private limited company must have more than one director and shareholder.

According to the provisions of the South African Company Law, whether a company is owned by foreigners or South Africans, it is legally the same. Once registered, there is no limit on the validity period.

Both public and private companies must be effectively formed and registered. The company must have a registered office in South Africa, as well as bylaws and accountant records. If the accountant records are kept outside South Africa, the company must obtain these financials in order to prepare financial reports. Before the company starts operations, it must obtain the company name from the Registrar of Companies.

Public companies can sell shares to the public. The characteristics of this type of company are that there is no limit on the number of shareholders and there is no restriction on the transfer of shares. The company must submit annual financial statements to the Registrar of Companies for public supervision.

Private companies cannot issue shares to the public, and their equity transfers are limited to their members. The maximum number of members cannot exceed 50. Private companies do not need to submit financial statements to the Registrar of Companies every year, so they cannot be released to the public. The word PTY must be after the company name.

Both forms of companies must have annual accounting and audit reports prepared by registered accountants and auditors.

Company registration requirements:

All company registration application forms can be purchased at stationery stores that sell regulatory forms, and the cost is about 100 rand. Applicants can also buy them at the Ministry of Trade and Industry.

When registering a company, the applicant must write the name of the company to be registered on the CM5 form, in duplicate, and spend 50 rand to the tax bureau to stamp it, and then send it to the registration office. In order to save time and cost, it is recommended to write 3-4 optional company names for backup when submitting for registration. The approved company name will be reserved for 2 months. During this period, the company must submit relevant documents for the formation of the company and fill out the CM6 form. After filling out the form, it must be stamped by the tax bureau, and the fee is 20 rand. The submission of the form can be extended for one month, but no later than the end of the second month after obtaining the company name.

All companies must have an independent auditor to prepare annual financial statements. During the cooperation period, the auditor is required to sign a consent document.

The registration application must be delivered to the company registration office of the Ministry of Trade and Industry in Pretoria and submitted in person. If it meets the requirements, it can be completed within 3-5 working days. These application forms include:

①a copy of the approved CM5 form. (That is, the name of the company)

②the signature of the lawyer.

③CM22 Form. Two copies (with mailing address and office address).

④Cooperation prospectus, three copies (two copies are bound together and notarized by the notary office).

⑤CM1 Cooperation Certificate

⑥CM2 Form (the first page of the terms of the memorandum of cooperation). Stamped with the registration seal, the minimum fee is 350 rand, and an additional 5 rand will be charged for each additional 1,000 shares.

⑧CM44c Form

⑨CM46 Form, stamped with 60 rand

⑩Form 47 filled out by each board member.

CM29 Form.

In addition, there are two copies of CM31 and CM27 filled out by the auditor.

2. Closed private company

According to the Small Business Act passed by South Africa in 1984, a closed private company is a common form of small business. This type of enterprise has no directors and its business is carried out by the members themselves. This member must be a natural person (that is, an individual). This type of enterprise cannot be owned by a company or other closed company or foundation. Members of this type of company have the rights and obligations of shareholders and directors. Therefore, ownership and management of the company are combined. The maximum number of members of this type of company is 10, and generally, there are not many strict requirements for this type of company. This type of company is most suitable for small individual companies, which are limited liability companies. Its members must be natural persons.

3. Branches of foreign companies

Any foreign company can set up a business point in South Africa to conduct business, and this branch does not need to form a local company.

According to the requirements of the Company Law, the establishment of a branch needs to be registered as an "External Company". This organization is required to complete the registration procedures within 21 days after the establishment of the business location.

Registration requirements:

① Application form for registration of company

② Notarized copies of the company's articles and memorandum and translations in the official language of South Africa.

③ Indicate the mailing address and office address of the company to be registered.

④ The name, address and certificate of consent of the auditor to be hired in South Africa.

⑤ A copy of the financial statements of the head office in the previous year.

⑥ The situation of the registered company employing local managers and secretaries and their consent to work in the company.

⑦ Indicate the name and address of the person who will receive services on behalf of the parent company in South Africa.

In the absence of complicating factors, companies that want to set up branches in South Africa should roughly compare the legal fees for incorporation. If the parent company of the branch has a large nominal share capital, the total registration fee will be high. Because the calculation method of registration fees is the same as that of South African company registration fees. The larger the company's capital, the higher the registration fee.

The registered branch must have an office in South Africa and appoint a local auditor to audit the annual financial statements of the South African branch, as well as copies of the statements prepared at the request of its domestic parent company. These must be submitted to the Company Registrar of the Department of Trade and Industry.

In addition, South Africa also has partnerships and trust companies. The South African Company Act provides that, except for certain professions, a partnership may not have more than 20 members. The management of partnerships is based on general contracts and legal principles of partnerships. A partnership is not an independent entity and, except in certain circumstances, there is no registration requirement. A trust company is also an organization that does not require registration, mainly to help keep assets or act as a trade intermediary. This form of company is not common in South Africa.