Types of South Africa Companies

Healy Consultants assists entrepreneurs in the process of forming a company in South Africa. The following information on the types of South African companies will help to make an informed decision regarding what type of South African company best suits your business interests.

Entrepreneurs looking to start a company in South Africa should note that the two most popular options for foreigners undertaking South African company registration are a Limited Liability Company (PTY) or a Close Corporation.

	Private Limited Liability Company (Proprietary Limited Company)	Close Corporation
Shareholders	Can have a maximum of 50 shareholders and minimum of 1	Can have a maximum of 10 shareholders and a minimum of 1 (Shareholders are referred to as 'members')
Foreign Ownership	Yes	Yes
Capital	No minimum capital requirement, although directors must complete a form stating that capital is adequate for the purpose of the business.	No minimum capital requirement
Auditor's Report	Required to submit audited annual statements	Not required to submit audited statements
Liability	Limited Liability	Limited Liability
Set-up Duration	4-5 weeks	2-3 weeks
Others	Compulsory to convene an annual shareholders meeting	Meetings held at shareholders discretion and are not compulsory

Other Types of South Africa Companies

A sole proprietorship is limited to a single owner.

The owner is subject to full personal liability.

Profits are taxed according to personal income tax laws and not corporate tax laws. The lowest personal income tax rate is 18%, applicable for an annual income of up to R132,000 (US$17,400). The highest is 40% which is applied to annual income of R525,000 (US$69,200) and above.

Similar to a private LLC, but the directors and shareholders are personally liable for all debts incurred within the company.

Can have an unlimited number of shareholders, shares can be freely traded on the Johannesberg Stock Exchange.

Quarterly and annual financial reports must be lodged with CIPRO.

Must have a minimum of 2 directors and 7 shareholders.

Benefits from the protection of limited liability.