COMPANIES
A Company is defined as a legal entity incorporated in terms of Act 71 of 2008
This includes any company that was registered under the previous companies act( 61 of 1973) and a close corporation ( regardless of whether it has in the meanwhile been converted into a company)
A company will be registered with the companies and intellectual property( CIPC)
PURPOSE OF THE COMPANIES ACT
Companies act 71 of 2008 has among other the following goals:
To encourage entrepreneurship and thereby promote participation in different sectors of the south African economy
To promote the overall well-being of the South African economy
To simplify the process of registering and managing a company as a form of ownership
To ensure the rights and obligations of shareholders and directors are aligned with each other by ensuring companies are managed in a responsible manner.
To ensure non-profit companies are established and managed in a manner that will make their functioning more effective while ensuring accountability at the same time.
Different types of companies
Companies act 71 of 2008 makes provision for different types of companies:
Profit companies
Non-profit companies
Private companies
State owned companies
Personal liability companies
Public companies
For the purposes of our discussion, our focus will be on Private Companies and Public companies
A Public company will be allowed to list on the JSE and offer shares to the general public in order to raise capital
A private company may not be stated owned and it's Memorandum of Incorporation(MOI) has to specify that no shares will be offered to the public and shares are not freely negotiable or transferable
The prescriptions of the companies Act no 71 of 2008
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The name of the company
The name must end in the words or letters:
Limited ( Abbreviated ltd) if it is a public company
Proprietary limited ( Pty ltd) in the case of a private company
The name may not pretend to be associated with any person or business. It may not be misleading or pretend to be associated with the south African government or any foreign government if it is not.
The name may not e undesirable or hateful to any group of society
Any company may reserve a name for the business provided it is not the same or too similar to an existing business
Incorporated(abbreviated inc.) if it is a personal liability company
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