Here’s why – A private company is treated by law as a separate legal entity and must also register as a taxpayer in its own right. It has a life separate from its owners with rights and duties of its own. The owners of a private company are the shareholders. The managers of a private company may or may not be shareholders. Under the current Companies Act, private companies are no longer limited to 50 members.
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Life of the business is perpetual, that is, it continues uninterrupted as shareholders change. |
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Shareholders have limited liability, that is, they are generally not responsible for the liabilities of the company. However, certain tax liabilities do exist. One such liability is where an employer or vendor is a company, every shareholder and director who controls or is regularly involved in the management of the company’s overall financial affairs shall be personally liable for the employees’ tax, value-added tax, additional tax, penalty or interest for which the company is liable, that is, where the taxes have not been paid to SARS within the prescribed period |
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Personal liability on directors. |
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Transfer of ownership is easy. |
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Efficiency of management is maintained. |
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Easier to raise capital and to expand. |
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Adaptable to both small and medium to large business |
Are you interested in finding out any further details regarding other business structures or which best suits you?
Drop our expertly trained consultants an email and we’ll conduct a needs analysis with you covering all the following considerations:
• Control
• Limitation of Liability
• Cost and Complexity of Formation & Legal Structure
• Flexibility & Future Needs
• Tax Implications
• Ongoing Administration
• Continuity of Existence
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