Converting CC to Pty Ltd has many advantages. Every close corporation has to make the change eventually. It is no longer possible to register a new close corporation. However, you can carry on trading under a close corporation that existed before 1 May 2011. Close corporations will slowly become extinct and every close corporation will, at some point, have to be converted to a private company.
Many people chose to trade as a close corporation because it gave them the advantages of incorporation, with lower costs and simpler administration. Virtually all the advantages that a close corporation had, can also now be obtained by registering a private company under the Companies Act, 2008. For example:
- the annual return fee is the same regardless of whether you have a close corporation or company;
- small private companies do not need to be audited or produce audited statements; and
- small private companies do not need to convene an Annual General Meeting (AGM).
Many argue that there are actually more advantages to being a private company rather than a close corporation:
- Compete with bigger companies in the same market;
- Invite other parties to invest as shareholders in your business;
- Raise more capital to grow your business;
- Enable other close corporations and companies to be shareholders in your business;
- Benefit by being regulated by a law (the new Companies Act) that is up to date with international best practice;
- Administer your business electronically;
- Avoid disputes between members; and
- Ensure that the rights, responsibilities, and duties of members are clearly set out.
We can prepare the documents you need to do this and help you with the process. By using our services, you can save time by doing it faster, and saving money by getting it right and not having to repeat the same steps a number of times. Contact us for assistance if you’re interested in converting CC to Pty Ltd.