When the new Companies Act came into effect back in 2010, it ceased to be possible to form a CC, but existing CCs were, and still are, allowed to remain in that form.

What many people don’t realise is that a CC is not the best form of business entity. It has been surpassed by the (Pty) Ltd company.

The main differences are –

• nobody knows who are the shareholders (owners) of a company. This information is not registered with CIPC, only on the share register at the registered office of the company.
• the members (owners) of a CC are registered at CIPC, so anybody can see who they are.
• a CC is required each year to produce Annual Financial Statements to International Financial Reporting Standards and these cost about R10 000.
• the equivalent (Pty) Ltd company does not have to draw up any formal financial statements.

So, why do I still get people bemoaning the end of CC registrations?

Simply because they don’t know the above.