Types of company
From The Forum SA
Act 71 of 2008, the Companies Act, provides for two types of companies:
- profit companies, and
- non-profit companies.
Profit companies are further divided into:
- State owned company
- Private company
- Personal liability company
- Public company.
Definition of private company
In order for a company to be classified as a private company, it may not be a state-owned company, its Memorandum of Incorporation prohibits the company from offering any of its securities to the public and restricts the transferability of its securities.
Definition of a personal liability company
In order for a company to be classified as a personal liability company, it must meet the requirements of a private company and state it is a personal liability company in its Memorandum of Incorporation.
Definition of a public company
A company is a public company if it is not a state-owned company, private company or personal liability company.
A non-profit company is:
- incorporated for a public benefit or other object as required by item 1(1) of Schedule 1 of the Companies Act (71 of 2008); and
- the income and property is not distributable to its incorporators, members, directors, officers or persons related to any of them except to the extent permitted by item 1(3) of Schedule 1 of the Companies Act (71 of 2008);