Some facts about a Close Corporation (CC)

A Close Corporation is a legal entity, which means that the law looks at a Close Corporation as an entirety.
It is a business entity, as thus usually the members are excluded from financial obligations, unless specifically stipulated otherwise.
At the moment, no annual returns are required for a Close Corporation, and audited financial statements are not a recuirement either.

Meetings for a Close Corporation are not mandatory and can be held as and where necessary Close Corporation may have an interest in other companies,
by becoming shareholders in those companies All members may play an active role in running and managing the Close Corporation on a day to day basis

The proprietor or member is not personally held liable for the debts of the Close Corporation
Legal procedures for registrations and admin are kept relatively simple for a Close Corporation.

Members of a Close Corporation are the registered "owners" of the Close Corporation, and are listed during the registration process of the Close Corporation.

Any changes in respect of members of a Close Corporation must be communicated to the Close Corporation Registration Office in Pretoria.

Non South Africans (or foreign nationals) may become members of a Close Corporation,
as long as their membership details have been authorised by the Registration Office,
by confirming their nationality per letter when registering the Close Corporation.

A Close Corporation may have anything from one member up to a maximum of ten members at any given time.
There are however no limitations as to the number of employees a Close Corporation may have.
Where a member of a Close Corporation is under the age of 21, the registration documents have to be signed by either a parent or guardian.

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A Close Corporation is more flexible and simplified than a company or Pty (LTD). A Close Corporation is ideally suited to small businesses because it is much simpler to administrate. Managerial and admin requirements for Close Corporation are much less formal than for companies. In contrast to a company, the Close Corporation act has been designed in a way that an ordinary person would be able to complete the documents for registration of the Close Corporation.

Although a Close Corporation is required to appoint an Accounting Officer, audited financial statements are not required at this time. The Companies Act prescribes mandatory meetings for Companies, such as annual general meetings, but this is not a requirement for a Close Corporation. Meetings may be held between members when necessary.

Members of a Close Corporation do not all have to take an active role in the running process of the business. Although, because of the size of most Close Corporation's the members are more often than not the managers of the busines and thus play an active role in the day to day running of the Close Corporation.



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