Public Company (South Africa)
Public Company in South Africa:
A public company is a company that may offer its shares to the public, but is restricted in its right to make pre-emptive share offers.
Public companies must have at least three directors. Only public companies may be listed on the Johannesburg Securities Exchange. Public companies must be audited and must produce audited financial statements which are tabled with their shareholders annually. Depending on the size of the public company, the company may also be required to have an Audit Committee and a Social and Ethics Committee.
A public company, on the other hand, imposes no restrictions on the transferability of its shares to third parties, thereby ensuring that it has a relatively easy access to capital.
A public company is considered to be a juristic entity, that exists separately from its owners and shareholders, and can exist for perpetuity. A public is similar to a private company in that they are both considered to have a legal personality, and consequently, the shareholders of public companies have limited liability. Thus, where such a company liquidate, the shareholder’s loss is limited to the amounts that they originally vested, and they will not be held personally liable for debts incurred by the company.
- Under the Companies Act, this entity is referred to as the “public company”. A Public Company may be setup with 3 directors and 1 shareholder, who can be foreigners and non-residents. Furthermore, there is no minimum share capital requirement; however, at incorporation, the company will be required to disclose how it plans to raise its capital;
- A Public Company appoint a resident public officer and submit annual returns and tax returns. Additionally, the Public Company will appoint a resident company secretary and submit audited financial statements;
Important features of a private company include the following:
- There must be at least three directors and seven shareholders;
- Only public companies may be listed on the JSE;
- A public company can freely transfer its shares to any member of the public;
- They must be audited and must produce audited financial statements;
- The auditor cannot serve for a period of more than 5 years;
- In some instances, it is a requirement to have an Audit Committee and a Social and Ethics Committee;
- Where a public company intends to vary its constitution, such variation can only be done by particular as well as a written, special resolution that is signed by all relevant stakeholders;
- The suffix for a public company is Ltd.
Maintain a Public Company
As the company secretary or managers of a public company, you will have to meet certain compliance obligations. It is important that you update our registers with any changes to the management, administration and governance of the company or to its status.
- Company Records
- Accounting Records
- Annual Returns
- Financial Statements
- Appointment of an auditor and a Company Secretary and rotation of auditors
- Appointment of Audit Committee
- Annual General Meetings
- Obligation to notify the CIPC of certain changes
- Public offering of company securities (Prospectus)
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