| Close corporations or CC's are a type of ownership | | | | knowledge or skills that is required by the CC. |
| that is suitable for small to medium sized enterprises in | | | | - A founding statement is required to form the |
| South Africa. If you are looking for an easy and | | | | business, the changing of the founding statement is |
| inexpensive form of ownership that has a legal | | | | easy and inexpensive. |
| presents then a CC is the right option for you. Just like | | | | - The liability of the members is limited, except under |
| any form of ownership, there are advantages and | | | | exceptional circumstances. |
| disadvantages, the advantages and disadvantages | | | | - Close Corporations are not required to hold annual |
| need to be taken into consideration when deciding on | | | | general meetings or have the financial statements |
| what form of ownership is the best for your business. | | | | audited. This is an advantage as it makes the running |
| The advantages of a CC are: | | | | of the business easier and cheap as audit fees are |
| - The registration process is affordable and simple as | | | | avoided. |
| there are only a few regulations. | | | | - A CC has the capacity to have one to ten members, |
| - Close Corporations are permitted to give financial | | | | this is an advantage because it increases the amount |
| assistance to member such as a loan to acquire an | | | | of capital that can be raised as there are more people. |
| interest in the corporation. | | | | As you can see from the above list, there are a |
| - A CC is regarded as a legal entity or person which is | | | | number of advantages to registering a Close |
| an advantage because the continuity of the business is | | | | Corporation. In order for you to make an informed |
| not linked to the life or status of the members. | | | | decision in deciding what form of ownership will suit |
| - The income that is issued to the members of the | | | | your needs, it is recommended that you also consider |
| business is exempt from normal tax. | | | | the disadvantages of a Close Corporation. Only after |
| - The owner's interest in the Close Corporation does | | | | considering both the advantages and disadvantages |
| not need to be in proportion to their capital. This means | | | | will you be able to make the right decision to determine |
| that a member can contribute less capital into the | | | | if a CC is the right form of ownership for your |
| business as he or she will be bring in experience, | | | | business. |