About company with share capital

Raise extra capital to expand your business by registering it as share capital.

Share capital refers to the portion of equity a company raises by issuing ordinary or preferential shares to individuals or institutional investors to finance part of its expansion. For example, a company can set aside share capital to exchange for computer servers instead of directly purchasing the servers from existing equity.

As the process to register a company with share capital is complex, you are advised to acquire the services of an attorney when registering with the Companies and Intellectual Property Registration Office (CIPRO).

There are two kinds of share capital, namely:

• Ordinary Share: it gives an ownership right to the holders of the stock and hence the shareholders are entitled to the earnings of the company according to their stake. Shareholders also get dividends on those stocks as and when they are given by the company. The liquidity of ordinary stocks is very high and they can be bought or sold at anytime of the market hours.
• Preferred Share: These stocks also give ownership rights to their holders. Preferred shareholders enjoy the privilege of receiving dividends from the company in preference to ordinary shareholders. Preferred stocks have less liquidity than ordinary stocks.

Buyers of the Share Capital become owners of the company in accordance with their stake in the company and hence posses a certain degree of control over its operation.

What you should do

• Download or obtain application forms and submit them to CIPRO.
• Provide the following documents:
• CM1: Certificate of Incorporation. This is the document that is signed and stamped by the Registrar of Companies when all the accompanying supporting documents (as listed above) have been checked and finalised.
• CM2: Memorandum of Association plus CM2A, CM2B, CM2C if more than one shareholder or CM2D if there is one shareholder (the Memorandum of Association must indicate the following: the amount of share capital the company will have; and the division of share capital  into shares of a fixed amount.)
• Provide a certified copy of the green bar-coded identity document of the signatory of the special resolution.
• For manual submissions, provide certified copies of the green bar-coded identity document; certified copies of passports and in the case of refugees or asylum seekers – a certified copy of valid prescribed documentation.  Where there is more than one member involved in the case of a close corporation or company, all members should still provide certified copies thereof including the person who will be lodging on behalf of others.

Timeframe

It takes four weeks to register your company as share capital.

How much does it cost

Fees are R350 plus R5 per 1000 authorised capital in the case of par value shares, or R5 per 1000 in the case of no value shares.

Forms to complete

(Forms are provided in PDF format. To open PDF documents, you need to have Adobe Acrobat Reader 4 or higher installed on your computer.)

• Certificate of Incorporation of a Company having a Share Capital, Form CM1 
• Memorandum of Association of a Company having a Share Capital, Form CM2 
• Notice of Registered Office and Postal Address of Company, CM22
• Contents of Register of Directors, Auditors and Officers, CM29
• Notice of Consent to appointment, change of name by auditor or removal of auditor, CM31
• Articles of Association of a Company having a Share Capital not Adopting Schedule 1, CM44A  
• Signatories to Articles, CM44C
• Certificate to Commence Business, Form CM46
• Statement by Directors regarding Adequacy or Inadequacy of Capital of Company, Form CM47

Who to contact