Why Register a Close Corporation (CC)Registration Solutions > Close Corporations > Why Register a Close Corporation (CC)A close corporation (CC) is the most basic form of formal business structures and is ideal for a small business that does not need a complicated legal organisation. A close corporation must have at least one member, and there may not be more than a total number of 10 members. A member must be an individual, that is a natural person.
There is no separation between the ownership and the management of a close corporation. The assets of the close corporation are its own exclusive property, as are its debts. This means that the members enjoy limited liability. However, they could lose this benefit by breaking certain requirements of the Close Corporations Act.
Why Register a CC?
Entrepreneurs, who 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:
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A CC is a legal entity
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No annual returns are currently required. This should be in place later this year.
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Audited financial statements are not required
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Meetings are not compulsory and can be held on an ad hoc basis
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CC’s may become shareholders in other companies
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All members may take part in the management of the CC
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The proprietor or member is not personally liable for the debts of a CC
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The legal procedures for registration and administration are kept relatively simple.
Who owns the CC?
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The members of a CC are the registered "owners" and are listed as part of the registration process.
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Any changes in respect of the members of the CC must be notified to the Close Corporation Registration Office in Pretoria.
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Non South Africans may be members of a CC, provided that their membership details are authorised by the Registration Office
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As indicated, a Close Corporation may have a minimum of one member or a maximum of 10 members. However there are no restrictions in respect of the number of employees in a Close Corporation.
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If the member of a CC is under 21, the registration document must be signed by a parent or a guardian.
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