| Why Register for a CC? |
| A close corporation is the simplest, easiest
and most practical independent legal
business structure that can be established
in South Africa. |
| Small businesses, whose members have a close
relationship and want to start up with
simple administration and legal procedures,
are advised to register for a CC. |
| Other advantages include: |
| » A CC is a separate legal entity. |
» Members’ assets and liabilities are
completely separate to the CC’s assets and
liabilities. This makes
it easy to sell the CC and protects your personal assets and life
from business risks. |
| » Annual returns are currently required. |
| » Audited financial statements are not
required. |
| » Meetings are not compulsory and can be held
on an ad hoc basis. |
| » CC’s may become shareholders in other
companies. |
| » All members may take part in management. |
» The proprietor or member is not personally
liable for the debts of a CC, if the Members
don’t sign
personal surety for outstanding debts. |
| » The legal procedures for registration and
administration are kept relatively simple. |
| » The transfer of ownership is easy. |
» One looks more professional when trading
under a CC than under a personal name -
especially
when looking for new opportunities, tenders and contracts. |
» Annual financials are not required to be
audited by an auditor, but only signed off
by an Accounting
officer – this means less cost. |
| Disadvantages of doing business through a
CC: |
» A member can be held personally responsible
for loss through failure to act with the
skills and care
than can be reasonably expected of a person of his/her skill and
experience. You can therefore be
held responsible in your personal capacity for your CC's debt if
your creditors can proof that you
have acted recklessly. |
» Every member is an agent for the CC - and
may act on behalf of the CC and participate
in
management. |
| » No more than 10 members are allowed. |
» Certain fundamental decisions for the CC can
be made by 75% of the members, expect when
the
association agreement between them
stipulates differently. |
