1. What is a private company?
A private company is the most common and simplest form of company to be registered. It is comparable to a close corporation. Close corporations are no longer registered. A private company is treated by South African law as a seperate legal entity (a juristic person) and has to register as a tax payer in its own right.
2. How is a private company different to a public company?
"Private Companies may not offer shares to the public and restrictions are also placed on the transferability of their shares. It is also not compulsory for a private company to appoint a company secretary or to appoint an auditor unless the private company meets certain requirements."
3.What is the difference between shareholders and directors?
Shareholders own the company and the director/s manage the day-to-day running of the company.
4. What is the minimum number of directors a private company can have?
A private company must have at least one director.
5. What is an incorporator?
An incorporator is a person or company forming a new company. An incorporator is not necessarily also a director nor a shareholder. A private company must have at least one incorporator. The director and incorporator may be one and the same person.
6. Who can be a director of a private company?
Any person who is not ineligible or disqualified from being a director by law and who holds a valid identity document/passport. A juristic person cannot serve as a director of a private company.
7. Can a foreigner register a private company in South Africa?
Yes, so long as the person has a valid passport.
8. Which legislation and other legal documents govern a private company?
All companies registered in South Africa including private, public, non-profit, state-owned and external companies are all governed by the Companies Act 71 of 2008 and the Constitution of the Republic of South Africa as well as each company's Memorandum of Incorporation. Other legislation is also applicable to companies depending on the industry and category of company the company may fall under.
9. Must a private company's registered office address be inside South Africa?
10. What is a Memorandum of Incorporation?
All companies must have a Memorandum of Incorporation (MOI) which sets out the rules agreed by the shareholders for the management and maintenance of the business. Private companies may be registered with a standard or a customised MOI. The standard MOI is provided by law and is integrated into the company registration process (click here to preview a standard MOI). A customised or non-standard MOI allows shareholders to impose certain conditions or waive certain requirements. Such MOIs must be attached to the application and may require the assistance of a legally qualified person. At present, private companies with customised MOIs can only be registered manually.
11. Must a company be registered with a corporate name?
"A private company does not necessarily need to be registered with a name. The company will then be identified by a unique number followed by the suffix ""(Pty) Ltd""."