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When the new Companies Act of 2008 was finally implemented a year later, we could no longer form Close Corporations. But should you convert?

The main reason that CCs fell away was that owner managed companies (and a CC is owner managed) became so similar to CCs that the latter became redundant.

The prinicipal changes were that an owner managed company:

1) Did not need an audit or an auditor

2) Did not need a company secretary

3) Did not need to draft formal financial statements.

Contrast these with a CC which:

1) Does not need an audit, but must have an Accounting Officer

2) Does not need a company secretary.

3) Must draft formal financial statements to International Financial Reporting Standards.

So it is actually less expensive to maintain a company than a CC, so it makes sense to convert.

 

 

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Contact us today or set up a free meeting with our CEO, Derek Springett, to discuss your options. We have been offering expert financial advice and business services since 1971. You can also visit our online store to see our list of financial services.