Close Corporations are no longer available as new business entities but could still be acquired if:
* A shelf close corporation is available for purchase; or
* A business entity is being bought which is a close corporation.
Whilst there are pros and cons linked to having a #CC versus a private company, two main limitations exist namely companies cannot hold a member's interest in a CC, this could be a deterrent for potential investors who cannot or choose not to be a #member of the CC as they are unable to acquire and hold shares. Secondly #expansion into #international#markets through a CC can be limited.
A close corporation can be converting to a private company (#Pty) by submitting the required documentation and is fairly inexpensive. The impact from a statutory perspective:
· All existing close corporations can convert, but not compulsory.
· You will retain your close corporation’s name.
· Your new registration number will be e.g., XXXX/XXXXXX/07.
#Operationally you still need to assess existing #contractual relationships with clients, suppliers, #funders, trademarks and so forth to determine the processes to be followed to avoid any business disruption. Importantly inform #procurement at you clients of any such changes so as to ensure #cashflows or clients' payments are not delayed.
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