Close corporation to Pty Ltd conversion
A close corporation can be converted into a private company at CIPC and keep its registration number, its history, its contracts and its bank account. The application is one form, but it travels with a members’ resolution, a new memorandum of incorporation, a director appointment form and certified copies, and CIPC rejects the file if any of them is out. We prepare the whole file and lodge it. Fixed price, in writing.
Independent paperwork service. ProperSA is an independent private company, not CIPC. You can file the conversion yourself with CIPC for the R175 fee. Our fee pays for preparing the resolution, the MOI, the director appointments and the supporting file so it is accepted first time, and for following it to the new certificate.
What is included
- Your annual returns and beneficial ownership checked first, because CIPC requires the CC’s annual returns to be up to date before it will convert it
- The members’ written resolution to convert, showing that members holding at least 75 percent of the members’ interest consented, drafted for signature
- The application on CoR18.1, the standard memorandum of incorporation on CoR15.1A, and the director appointments on CoR39
- The solvency letter CIPC asks for, confirming the CC is not in liquidation or business rescue
- Any name, financial year end or registered address change filed alongside, if you want one, with CIPC’s fee for that form told to you first
- The file lodged with CIPC, queries handled, and the new registration certificate, MOI and share certificates for each shareholder delivered to your client portal
- A next steps sheet: telling SARS, the bank and your customers, the share register, and the accounting officer reappointment
What the conversion actually does
CIPC’s explanatory note on CoR18.1 puts it plainly: the juristic person that existed as a close corporation continues to exist, but in the form of a company, and all assets, liabilities, rights and obligations continue as if the conversion did not occur. Nothing is sold or transferred. The registration number carries across with a new suffix, and the members are entitled to take up shares, in whatever proportion they agree, and may or may not become directors.
Three things do change. The members’ interest becomes shares, so a share register and share certificates are needed. A board of directors is appointed on CoR39. And the accounting officer’s appointment ends automatically, so the company reappoints them if it wants the same person to do its independent review.
What blocks it. Annual returns in arrears, a CC in liquidation or business rescue, or a resolution that does not show each member’s interest and who voted which way. We check all three before anything is lodged.
How ordering works
- Order online and answer the questionnaire on the members, the interests and who will be the directors.
- We check the CC’s standing at CIPC, then send the resolution, MOI and forms for signature within 2 business days.
- We lodge the file with CIPC, handle any query, and deliver the new certificate, MOI and share certificates to your portal.
Not sure this is the right one for you? Ask us first and you get a written answer within one business day.
What we will need from you
CIPC lists what must accompany the CoR18.1, and every item below maps to that list.
- The close corporation’s registration number and its founding statement (CK1 and any CK2), so the members and their interests are read from the record.
- Every member’s full names, identity number and percentage interest, and who consents to the conversion. Members holding at least 75 percent of the interest must consent, and the resolution must show each member’s interest and vote.
- Who will hold the shares and in what proportion, which need not match the members’ interests, and who will be the directors, who need not be the members.
- Certified identity copies of every director, which CIPC requires with the CoR39.
- Confirmation that the CC is solvent and not in liquidation or business rescue, for the letter CIPC asks for.
- Any change you want at the same time: a new name (reserve it first, CIPC processes the conversion only once the name is decided), a new financial year end, or a new registered address.
- The accounting officer’s details, so the reappointment note is ready.
Frequently asked questions
Do I lose my registration number or my history?
No. CIPC’s own explanatory note says the juristic person that existed as a close corporation continues to exist in the form of a company, and every asset, liability, right and obligation carries on as if the conversion had not happened. Your registration number stays, with the suffix changing from 23 to 07, and your bank account, contracts and tax number carry across. What changes is the form: members become shareholders and a board of directors is appointed.
Why convert at all?
No new close corporation has been registered since the Companies Act 2008 took effect, so a CC reads as an older structure to banks, tenders and foreign customers, and some counterparties refuse the form outright. A company also lets you separate ownership from management, bring in investors through shares, and use the standard MOI that lenders and buyers understand. If none of that applies to you, a CC can carry on indefinitely and you do not have to convert.
What does CIPC charge?
The conversion fee on CoR18.1 is the same as the fee for a notice of incorporation, R175 for a standard MOI on CoR15.1A or B, which is inside our price. If you also change the name, the financial year end or the registered address at the same time, those forms carry their own small CIPC fees, which we tell you before filing.
What must be in place first?
Members holding at least 75 percent of the members’ interest must consent in a written resolution, the CC must be solvent and not in liquidation or business rescue, and CIPC requires every annual return of the CC to be up to date at the time of conversion. Outstanding annual returns are the usual blocker, and we can file them first.
What happens to the accounting officer?
CIPC states that the accounting officer’s appointment ends automatically on conversion. If the same person will do the company’s independent review, the company simply reappoints them, and no notice to CIPC is needed unless you appoint an auditor, which goes on CoR44.
Keep exploring
This is an administrative service performed with the members’ authority on the close corporation’s CIPC record. ProperSA does not give legal or tax advice on whether to convert, on the shareholding to adopt or on the tax consequences of a change in ownership; where a matter needs an attorney or a registered tax practitioner, we say so and refer you before any work starts. CIPC requirements and fees are as published in the CoR18.1 explanatory note and fee schedule at the date of writing.