When do I need to register a private company?

You will need to register a private company when you start a new business in South Africa to gain legal recognition and establish its own legal presence, credibility, and financial advantages with not only the CIPC but with SARS. A registered entity gives credibility to your business as people know they are not interacting with a fly by night company.

What legal risk does having a private company manage?

Private company registrations separates personal and business liabilities and it safeguards personally owned assets from business risks and those owned by the business.

Whatever its owned or owed by the company, the risk associated will always belong to the company. This is good in mitigating risk from your personal assets.

Whatever it owned or owed by the company, the risk associated will always belong to the company.

Why do you need to register a private company?

 A private company offers limited liability, credibility, access to funding, tax benefits, and a formal business structure. It distinguishes personal and business assets, enhancing professionalism and trust with clients and stakeholders. It establishes a separate tax presence with SARS. And it also allows the company to grow by gathering funding from investors.

What You Need For CIPC Company Registration?

• 3 x Proposed Names for Company
• Certified IDs of Director(s)
• Residential/Business Address
• Telephone Number(s) and Email Address(es)

Other Things To Consider Once You Have Registered A Company?

1. Business Emails
2. Logo Design
3. Corporate Identity
4. CSD Registration
5. BBB-EE Affidavit
6. Website
7. Hosting
8. Digital Marketing

Common pitfalls / inclusions / considerations to note when using a private company vehicle

You need to ensure compliance with all legal requirements and keep the company’s annual filing obligations up to date to maintain the company’s active status. Otherwise, private companies get deregistered, which kills the whole entity.

You will need to consider the implications of having a shareholding and directorship to avoid pitfalls in company management and any disputes that may arise from the parties.

De-Registration Of The Company

Cipc reserves a right to de-register a company if annual returns are not files.

Filing Requirements:

Annual Filing: Companies and CCs must submit BO declarations at least once annually, or as and when changes occur.

Hard Stop Functionality: A hard stop functionality was introduced on July 1, 2024, requiring BO declarations to be submitted alongside annual returns.

Mandate: A mandate must be provided to a natural person with a valid CIPC customer code to file on behalf of the entity.

Mandate must be signed by at least 50% +1 of the directors of the company (ordinary resolution requirements), and all the members of a CC .

BO Declaration

In the context of South African Companies Act, a “BO declaration” refers to a Beneficial Ownership Declaration, which is a requirement for companies and close corporations to submit information about their beneficial owners to the Companies and Intellectual Property Commission (CIPC).

Key aspects of BO declarations:

Purpose:

To establish a register of natural persons who ultimately own or control a company or close corporation, aiding law enforcement and mitigating risks.

Who must declare?

All companies and close corporations, including those with complex ownership structures, must submit BO declarations.

Threshold:

Any beneficial ownership or control below 5% need not be declared.

Complex Structures:

Entities must “drill down” to the natural person in complex ownership structures, including those involving juristic persons (companies, trusts, etc.).

Consequences of Non-Compliance:

Failure to comply with BO declaration requirements can result in the company or close corporation not being able to perform any transactions with CIPC, compliance notices, administrative fines, and ultimately, deregistration.

Registering Non-Profit Organizations

To register a non-profit organization (NPO) in South Africa, you’ll need to choose the correct legal structure (Voluntary Association, Non-Profit Trust, or Non-Profit Company), complete the relevant application form, and submit it to the Department of Social Development along with the required founding documents. 

Here’s a more detailed breakdown:

1. Choose Your Legal Structure:

• Voluntary Association: A simple structure suitable for smaller groups with a shared purpose. 
• Non-Profit Trust: A more complex structure, often used for larger organizations with significant assets. 
• Non-Profit Company (NPC): A company limited by guarantee, suitable for organizations with a more formal structure. 

2. Gather Required Documents:

• Completed NPO Application Form: Obtain this form from the Department of Social Development. 
• Founding Documents (depending on your chosen structure):
  • Trust: Deeds of Trust and a letter of authorization from the courts. 
  • Section 21 (NPC): Certificate of incorporation and memorandum and articles of association. 
  • Constitution: A document outlining the organization’s purpose, rules, and structure. 
• FICA Documents: For all members, directors, or trustees. 
• Certified ID documents of each director 
• Certified proof of address for each director 
• Certified proof of address for the business (if different to the director’s address) 
• Completed mandate to lodge form 
• Client information sheet 

3. Submit Your Application:

• Submit the completed application form and two copies of the founding documents to your nearest provincial social development office. 

4. Key Considerations:

• Unique Name: Ensure your NPO has a unique name that is not already in use.
• Clear Mission and Objectives: Define the purpose and goals of your organization.
• Board of Directors/Trustees: Establish a governing body to oversee the organization’s activities.
• Compliance: Ensure your organization complies with all relevant legislation and regulations.
• Register as a customer with CIPC
• Deposit funds with CIPC
• Reserve a corporate name with CIPC
• Submit documents to CIPC