South Africa Entity Setup

A private Company (Pty) Ltd is a type of business structure that is privately owned and operated, with limited liability for its shareholders. Shareholders of a private company have limited liability, which means that their personal assets are generally protected from the debts and liabilities of the company.

A branch office is registered in South Africa as an extension of its parent company and not as a separately incorporated entity. The liabilities of a branch office extend to its parent company.

A Public Company (Ltd) is a type of business structure that is publicly owned and traded, with an unlimited number of shareholders and a larger amount of regulatory requirements. Public companies can raise capital by issuing shares to the public, which can be more efficient than other forms of financing.

A company is a personal liability company if it satisfies the criteria for a private company and its MOI states that it is a personal liability company. The effect of a company being a personal liability company is that its directors, including its past directors, are jointly and severally liable, together with the company, for any debts and liabilities of the company that are, or were, incurred during their respective periods of office.

There are generally no minimum share capital requirements in South Africa, however the laws of certain industries such as insurance and banking do impose minimum capital requirements. Companies can be formed with nominal share capital and funding can be provided by way of cash, assets or services subject to exchange control requirements in case of foreign investment.

There are no restrictions in terms of shareholders jurisdiction.

It is required that a private company have at least one director in addition to the minimum number of directors required to satisfy any applicable requirement to appoint an audit and/or social and ethics committee. For tax purposes, every company carrying on business or having an office in South Africa must at all times be represented by an individual residing in South Africa. This individual is called the public officer of the company. The public officer must be approved by the South African Revenue Service and must be a person who is a senior official of the company or if no senior official resides in South Africa, may be another suitable person residing in South Africa. The public officer must be appointed within one month after the company begins to carry on business or acquires an office in South Africa. A local director can be appointed as both director and public officer.

Not applicable for this jurisdiction unless required by the company’s MOI. A corporate secretary is very common in practice.

Every company must continuously maintain a registered office in South Africa. 

May be signed by any initial director for the entity being incorporated or an authorised representative of the incorporator (i.e. if the incorporator is reflected as a company and not a natural person). We will require a notarised and apostilled passport copy of the signatory not older than 3 months.

May be signed by any initial director for the entity being incorporated or an authorised representative of the incorporator (i.e. if the incorporator is reflected as a company and not a natural person). Memorandum of Incorporation: To be signed by any initial director for the entity being incorporated.

Must be executed by the respective director. Certified/notarised passport copy/ identity document (if South African national) will be a supporting document to this consent form. The copies of the passports/identity documents can be notarised or certified in accordance with the applicable laws of any jurisdiction but should not be older than 3 months.

A standard memorandum of incorporation (MOI – an MOI is the governing document of the company which sets out the rights, duties and responsibilities of shareholders, directors and other persons involved in the company) be used the company will be incorporated within 5 business days.

The CIPC does registration of companies, co-operatives and intellectual property rights (trade marks, patents, designs and copyright) and maintenance thereof. Disclosure of Information on its business registers. Promotion of education and awareness of Company and Intellectual Property Law.

The final step is to decide the bank to work with. South has a growing banking infrastructure that startups and hyper growth companies alike benefit from. The process of establishing a bank account can be an unexpectedly long process that many companies do not sufficiently plan for. This can include extensive application documents, notarized director documents, KYC documentation and in person signatures. Common local banks in South Africa include First Rand, Absa, Standard Bank and FNB.

The South African companies registrar is the Companies and Intellectual Property Commission (CIPC), whose functions include the registration and maintenance of companies. Upon making an application to register a
company with the CIPC, the applicant will be required to submit the company’s adopted constitutional document which may either take the form of the standard Memorandum of Incorporation (MOI) as provided by law or a
customized MOI which has been tailored to include the company’s powers and impose specific protocols to be complied with by the shareholders and directors in respect of their rights and obligations in and to the company,
particularly, when dealing with or on behalf of the company.

If you are starting out and need to register as a company, you will have to contact the Company and Intellectual Property Commission (CIPC), formerly called CIPRO. Please note that Companies are first required to register with the (CIPC) offices before registering with SARS for an Income Tax reference number, click here for CIPC. Once a taxpayer registered with CIPC, SARS will automatically generate an Income Tax reference number. Taxpayer must then register on eFiling to transact electronically.

SARS eFiling is an online platform for the submission of returns and declarations and other related services. This service allows taxpayers, tax practitioners, traders and businesses to register and submit returns and declarations, make payments and perform a number of other interactions with SARS in a secure online environment.

The Unemployment Insurance Fund (UIF) gives short-term relief to workers when they become unemployed or are unable to work because of maternity, adoption and parental leave, or illness. It also provides relief to the dependents of a deceased contributor.

The Compensation for Occupational Injuries and Diseases Act 130 of 1993 intends to provide for compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees in the course of their employment, or for death resulting from such injuries or diseases.