Private Company (Pty) Limited) South Africa (2024)

FAQs

What is a private company Pty Ltd in South Africa? ›

When setting up a company, the Pty Ltd is short for “Proprietary Limited”. This is a company that operates privately, and has not offered shares to the general public. The owners of such a company limit ownership to no more than 50 non-employee shareholders.

Public versus private companies

The following are a few of the differences between public and private companies: The name of a private company ends with "(Pty) Ltd;" that of a public company ends with "Ltd."

The name of a private company must end with the words '(Proprietary) Limited' or '(Pty) Ltd'.

Private companies must have at least one director and one incorporator. The director and incorporator may be the same person. The word “person” includes a juristic entity. This means that a legal entity or a trust may be an incorporator of a new company.

Essentially, Pty Ltd is for private companies, and Ltd is for public companies.

A PTY (Proprietary Company) is a privately held company that can be used for many different purposes, and can be considered equivalent in many regards (but not all) to an S Corporation, LLC and/or Limited Partnership.

One of the drawbacks of a private limited company is that it can be challenging to raise capital compared to a public limited company. This is because shares cannot be sold to the general public, and private limited companies have restrictions on how they can issue shares.

Private Company (Pty Ltd): The cost of registering a Private Company (Pty Ltd) in South Africa ranges from ZAR 5,000 to ZAR 10,000, including legal and professional fees.

What is needed to register a Pty Ltd company in South Africa? ›

The normal time frame to register a pty can be anything from 3-5 business days according to cipc.

Greater administrative burden

Private limited companies have to maintain three types of legally required records: Records of company activities, such as lists of directors, shareholders and voting decisions. Financial records covering all transactions. Records of persons of significant control.

Yes, a foreigner can register a business in South Africa as long as they have a valid passport issued by their country of residence. There are no nationality requirements for directors and shareholders in a South African company.

Corporate tax rates in South Africa

The corporate tax rate in South Africa is a flat rate of 27% for all companies. However, trusts (excluding special trusts) in South Africa pay tax at a separate rate of 45%. Additionally, companies are subject to a capital gains tax (CGT) of 21.6%.

A Pty Ltd company is equivalent to a US C-corporation. We don't have the equivalent of LLC in Australia. These really only exist for tax reasons which we don't need because of franking credits any tax paid by the company is credited to the shareholders.

The main difference between a private vs public company is that the shares of a public company are traded on a stock exchange, while a private company's shares are not.

A proprietary company, the characteristic of which is abbreviated as "Pty", is a form of privately held company in Australia, Namibia and South Africa that is either limited or unlimited. However, unlike a public company there are, depending on jurisdiction, restrictions on what it can and cannot do.

The South African limited liability company (proprietary limited company) A South African limited liability company (locally known as a “proprietary limited company” or Pty. Ltd.)