Page 11 - Profmark BSA Guide 2025

CATEGORIES OF COMPANIES

The Companies Act provides for two categories of companies:
Profit Company: a company incorporated for the purpose of financial gain for its
shareholders; can be:
■ A state-owned company (SOC).
■ A private company (Proprietary Limited/(Pty) Ltd) – not state-owned and the
Memorandum of Incorporation (MOI) prohibits any offer to the public for the
subscription of any shares or debentures of the company. A private company
cannot, therefore, be listed on the stock exchange.
■ A personal liability company (Incorporated/Inc.) – meets the criteria for a private
company and the MOI states that it is a personal liability company. This type of
company is registered by professionals such as Doctors, Lawyers and Engineers.
■ A public company (Limited/Ltd) in any other case. Public companies are formed
to raise funds by offering shares to the public.
Incorporation of a Profit Company
■ One or more persons may incorporate, except for a SOC Ltd, which may also
be incorporated by an organ of state.
■ One or more directors required, three or more for public (Ltd) companies.
■ No limit on number of shareholders.
■ A private company must have share capital, no minimum or maximum
amount. Shares issued in accordance with the Companies Act do not have a
nominal or par value.
Private Companies
Private Companies are cheap and relatively easy to establish and there are no
minimum or maximum share capital requirements. A foreign entity may be a
shareholder.
SOC Ltd’s and Public companies are statutorily subjected to enhanced accountability
and transparency requirements, such as an audit, whereas private companies are not
required to appoint an auditor unless the company passes a public interest score, or
meets any other requirements set out in Regulation 28 of the Companies Act.
A private company is also not required to appoint a company secretary or hold
an Annual General Meeting.

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