The first step is to incorporate an entity. There are various types of legal entities which can be incorporated, depending on the nature of your business. Thereafter, you will need to issue or transfer shares to your proposed shareholders, which will require creating or updating the company’s share register and the preparation of ancillary documents such as share certificates.
Shareholders agreements are needed to regulate dealings between the company and its shareholders on the one hand, and between shareholders amongst themselves on the other hand. These documents often regulate matters that are not typically incorporated into the company’s MOI, such as loan financing, equity financing, pre-emptive rights, options and deemed offers.
The standard CIPC MOI provides for the default position under the Companies Act in relation to various matters such as director appointments and quorum for meetings, but does not regulate other important issues such as specially protected matters. In many cases, the Companies Act allows you to vary the default position in a way that is customised to your specific business needs. It is a good idea to have a bespoke MOI which adequately regulates corporate actions in accordance with your business’ preferences and requirements.
Annual returns are required to be filed within 30 days of the anniversary of the incorporation of the company each year. The relevant form needs to be completed and submitted to CIPC. In some cases, the company’s annual financial statements will need to be filed with the annual return, whereas in other cases, a financial accountability supplement can be filed. It is imperative that companies comply with the requirement to file their annual returns to avoid penalties and deregistration.
The amendment of a company’s MOI requires a special resolution of the shareholders. Once obtained, a filing must be made with CIPC, which CIPC has to accept and place on file. Note that changing a company’s name or its share capital constitute amendments to the MOI. Boardserv can assist you with both the resolutions and the filing with CIPC.
Once the necessary resolutions and consents have been obtained, a filing must be made with the Companies and Intellectual Property Commission (CIPC) in terms of which director details are updated. Boardserv can assist you with both the resolutions and consents, as well as the filing with CIPC
It is imperative that an agreement be put in place to properly regulate the transaction. Depending on the nature of the transaction, this could take the form of a subscription agreement, a share sale agreement or a share repurchase agreement. In addition, the relevant resolutions will need to be passed to ensure that the necessary approvals required by the Companies Act and the Company’s constitutional documents are duly obtained. To implement the transaction, you will need to update the company’s share register and prepare the necessary ancillary documents such as share certificates and share transfer forms.
