NEW PTY REGISTRATIONS
The new Companies Act was implemented on the 01st of May 2011. It has brought with it several changes including the discontinuation of Close Corporations.
The New Companies Act provides for two broad categories of companies to be incorporated under the Act. A company can either be a profit company or a non-profit company.
Non-profit companiesA non-profit company is incorporated for a public benefit purpose and the income and property are not distributable to its incorporators. A non-profit company may be regarded as a successor to the previous Section 21 companies.
Profit companiesA profit company is defined as a company incorporated for the purpose of making financial gain for its shareholders. There are four sub-categories of profit companies, namely:
State-owned Companies, such as ESKOM or SAA. The names of these companies must be followed by the suffix SOC to denote that they are state-owned, for example ESKOM SOC Ltd. Personal Liability Companies, which are companies that meet the criteria for a private company and the company's Memorandum of Incorporation states that it is a personal liability company. These are usually recommended for professionals such as engineers, doctors, attorneys, accountants and architects for example. (A personal liability company is one where all directors, past and present, are jointly and severally liable together with the company for any debts and liabilities incurred by the company during their term as directors.) The name of such a company will be followed with the prefix Inc (Incorporated), for example ABC Engineers Inc. Private Companies (Proprietary Limited), which are companies that are not state-owned and the Memorandum of Incorporation prohibits them from offering their securities to the public and also restricts the transferability of its securities. Private companies need not have more than one director and one shareholder, but on the other hand, there is now no limit on the number of shareholders that a private company may hold. In the 1973 Act the amount was limited to 50. A private company will be denoted by the suffix (Pty) Ltd at the end of its name. Public Companies (Limited), are "all the others". In other words, if a company is not state-owned, a personal liability company, or a private company, then it is a public company.
N.B. A Propriety Limited/(PTY) LTD company is recommended for all business types other than those providing professional services such as legal or accounting or medical practices.
To register a new (PTY) LTD CLICK HERE