From 1 May 2011 (the date on which the new Companies Act became operative), it was no longer possible for close corporations to be registered in the RSA. However, those CCs that existed prior to the new Companies Act are still allowed to continue in existence. As a result of the new Companies Act, CCs are meant to comply with BOTH the new Companies Act and the Close Corporations Act.
CCs typically did not have auditors or company secretaries and were utilised for closely-held businesses. In terms of the new Companies Act, companies and CCs are REQUIRED to conform to certain reporting standards depending on what the public interest score of that CC or company is. There is a direct link between the PI score and reporting obligations (audit obligations in the case of CCs) under the new Companies Act.
Given the onerous reporting requirements that may rest on a CC, it may be prudent in certain instances for such CC to convert to a private company.
This is the standard CIPC form to be used.
