What is a Close Corporation?
A CC is a limited liability entity where it has its own legal personality and the ability to continue into perpuity. CCs are governed by the Close Corporation Act 69 of 1984.
No new CC's may be registered in terms of the implementation of the companies act 71 of 2008. This change came into effect on 1 May 2011.
For income tax purposes a CC is handled the same way in terms of companies.
Frequently asked questions
What is the maximum number of members a close corporation can have?
A CC is limited to a maximum of ten members.
What is the Close Corporation Act
This is the act that governs CC's - read here
What is the tax rate of a close corporation?
A close corporation is taxed at the same tax rates as a private company. The tax rate for cc's and companies with a year end after 31 March 2023 is 27%.
Who can be a member of a Close Corporation?
Membership is restricted to natural persons.
What happens when there is a deceased member of a Close Corporation?
The membership held in the Close Corporation will form part of the estate of the deceased member. The membership is seen a the property of the member and can as such be bequeathed.
Does a Close Corporation have a board of directors?
The entity has members and not directors. A Close Corporation is managed by its members (not a board).
Does a Close Corporation fall under the Companies Act 2008?
Existing close corporations will be managed under the close corporation's act. However, they can convert to companies and fall under the new companies act.
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