The new Companies Act is scheduled to come into effect in April 2010, June 2010 (The actual date of implementation remains uncertain), repealing the current Companies Act and Close Corporations Act in totality.
New business owners will have the option to trade as a Profit Company (being either a Private company, Public company or a Personal liability company) or a Non Profit Company.
By way of a brief explanation
- A Private company will be much the same as our current (Pty) Limited Companies, subject to the proviso that it may have more than 50 Shareholders.
- A Public company is much the same as our current LTD Companies and may be listed.
- A Personal liability company is analogous to the current section 53(b) companies viz an Incorporated Firm of Attorneys that may trade as a Company without the benefits of limited shareholder liability
- A non profit Company is similar to the current Section 21 company.
Foreign Companies registered in South Africa will only be regarded as conducting business in South Africa once they have completed certain activities, such as acquiring securities or debt. An additional requirement is that the foreign company must maintain an office within the Republic.
Current close corporations will continue to run in accordance with the Close Corporation Act, but it must be noted that provision has been made for these corporations to be converted into the applicable companies, as defined by the new Act.