You formed a NPC thinking that it would never accumulate profits, but now it sits with Retained Earnings and you can’t declare dividends. Can you convert it to a Pty? The straight answer is No. This conversion is not allowed in terms of Schedule 1(2)(1)(a) of the Companies Act of 2008. So what must you do? There are two issues How to extract the Retained Earnings and How to restart as a (Pty) Ltd company These can be dealt with in the following way – All Directors and employees of a NPC are entitled to reasonable salaries or earnings. You…
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