Private Companies may not offer shares to the public and restrictions are also placed on the transferability of their shares. Private companies must have at least one director and one incorporator. The director and incorporator may be the same person. The word “person” includes a juristic entity. This means that a legal entity or a trust may be an incorporator of a new company. Most private companies are owner managed and tend to have a smaller number of directors.
Private and Non-profit company registrations:
In terms of the Companies Act, 2008, a company may be registered with or without a company name. When a company is registered without a reserved name, its registration number automatically becomes the company name. This is the quickest way to register a company.
Such a company may transact with a trading (business) name or may apply to add a reserved name at a later stage. In this case, the company will need to first reserve a name and then apply for a name change, which constitutes a change to its Memorandum of Incorporation (MOI) (refer to Maintain a Business).
If your initial name reservation application is not approved, you will need to apply for new names. You may apply for between 1 and 4 names during each application process. Each name reservation application costs R125. A company registration for a private company = R795, and R1275 for a non-profit company.
There are five types of companies that you can register. If you wish to run a franchise business, you would register a private company. If you wish to register a church, you would register a non-profit company. A private school could be registered as a private company or non-profit company, depending on its objectives. An association of professionals such as lawyers, doctors, civil engineers etc., may be registered as a personal liability company.