Pty Ltd vs CC – Which one is Best?

//Pty Ltd vs CC – Which one is Best?

It is no longer possible to register a new close corporation or CC. However, you can carry on trading under a CC that existed before 1 May 2011. But CC’s will slowly become extinct and every CC will (at some point) have to be converted into a private company ‘(Pty Ltd)’. The Pty Ltd vs CC debate is not a simple one.

Pty Ltd vs CC – Which one is Best?

Many people chose a CC and still prefer a CC because a CC gave them the advantages of incorporation, with lower costs and simpler administration. Virtually all the advantages that a CC had, can now also be obtained by having a private company under the new Companies Act. For example:

  • the annual return fee is the same regardless of whether you have a CC or a company
  • small private companies do not need to be audited or produce audited financial statements
  • small private companies do not need to convene an annual general meeting (AGM)

The advantages of being a private company

Some argue that there are actually more advantages to being a private company rather than a CC:

  • Compete with bigger companies in the same market.
  • Invite other parties to invest as shareholders in your business.
  • Raise more capital to grow your company.
  • Enable companies and CCs 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 company electronically.
  • Ensure that the rights, duties and responsibilities of members are clearly set out.
  • Avoid disputes between members.

We can help you convert your CC into a company or register a company.

By |2019-07-23T11:09:43+02:00July 15th, 2013|Categories: Company Law|