[Question] CONVERTING CC TO PTY

[Angelee]

Hi Everyone

Please can I have some clarity on conversions.

A CC needs to be converted to a PTY. How is the member's interest converted to shares?

If two members exist with R50 contribution each for 50% interest, how does this now get converted to shares? How many shares? The value - must the business be valued in any way?

Any feedback is appreciated.

Thank you.

[Basment Dweller]

Members become shareholders.

Members interest converts to shares in the same proportion.

[Beancounter]

Members interest converts to shares in the same proportion.

Not necessarily in the same proportion. Refer the CIPC guide on completion of the CoR18.1 for conversion of CC to Pty.

[Angelee]

conversting cc to pty

Not necessarily in the same proportion. Refer the CIPC guide on completion of the CoR18.1 for conversion of CC to Pty.

Thank you to you both for your response.

However, my question is more directed to the form 15.1A on which you have to enter the amount of shares? If we want to convert from CC to PTY, retain both the members as shareholders and do employee incentive share scheme, how many shares must we issue and how is this calculated on what basis?

[CLIVE-TRIANGLE]

The number of shares on 15.1 refers to the authorised share capital. In your case, where you envisage issuing more shares down the line, make it substantial so that you actually can.

On conversion, you will issue shares to the existing shareholders, as agreed or determined by the directors, who would be the existing cc members.