Requirements for a section 21 or not for profit company
How can I form a Section 21 Company?
There are some legal requirements needed to be adhered to in order to form a Section 21 Company.
They are as follows:
- There must be at least 7 members and at least 2 directors
- In order to register a section 21 company your organization must:
- Be established for a lawful objective
- Have as its main objective the promotion of religion; the arts; science; education; charity; social activity or a communal or group interest
- Only use its income and property to promote the main objective
- Not distribute its money or property to the members or staff unless they are being paid for work they have done
- Appoint official auditors
- Keep financial and accounting records
- Hold an annual general meeting
- When the company is dissolved; its assets must be transferred to another organization with a similar purpose
- The proposed Section 21 company must reserve a name under which it will be registered
- The proposed section 21 company must have the services of an auditor (to be registered as such with CIPRO)
- The proposed section 21 company must have a registered physical address – not just a post box
- Section 21 companies are governed by the Companies Act 61 of 1973 as amended 2005 and compliance is required
How do I register a Section 21 Company?
- Register online as a customer with CIPRO so that you can register your Section 21 or register through an existing customer e.g. ask your accountant to register for you.
- Deposit R50 into client’s customer code and fill in an Application for Reservation of Name or Translated Form or Shortened Form or Defensive Name, CM5 form.
- Go to CIPRO and fill in the following forms:
- Notice of Registered Office and Postal Address of Company, CM22 (in duplicate)
- power of Attorney – Notification to act on behalf of promoters (only if using the service of a third party)
- contents of Register of Directors, Auditors and Officers, CM29 Notice of, consent to change of name, or resignation by auditor or removal of auditor, CM31 and CM51(if the Client Copy will be needed)
- memorandum and articles of association ( CM3 , CM4 , CM4A , CM4B , CM44 and CM44C ).
- 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.
- Pay the prescribed fee: R350 plus R15 ( CM51 ).