Advantages of the corporate form of business include: (1) the owners have limited liability, (2) ownership stock can be easily transferred, (3) corporations usually lasts forever, (4) raising money is easier than for other forms of business and, (5) expansion into a new business is simpler because of the ability of the …

The main advantages of a corporation are having greater access to resources, professional managers, limited liability, and unlimited life. The main disadvantages of a corporation are having large start-up costs and effort, heavy regulation, double taxation, and loss of control.

The biggest benefit a corporation offers over other business structures is liability protection, according to Entrepreneur. Shareholders do not risk losing personal assets because of a company’s debts, because corporations are considered separate legal entities from the people who own them.

Advantages of a corporation include personal liability protection, business security and continuity, and easier access to capital. Disadvantages of a corporation include it being time-consuming and subject to double taxation, as well as having rigid formalities and protocols to follow.

There are three common types of businesses—sole proprietorship, partnership, and corporation—and each comes with its own set of advantages and disadvantages. Here’s a rundown of what you need to know about each one. In a sole proprietorship, you’re the sole owner of the business.

A Close Corporation may have a minimum of one member or a maximum of 10 members. However there are no limitations in respect of the number of employees in a Close Corporation. If a member of a Close Corporation (CC) is under 21, the registration document must be signed by a parent or guardian.

THE ENTITY A Close Corporation is a legal entity with its own persona. To have its own persona means that, although it is not an individual person, it can act as if it is a person and certain rights and obligations are conferred to it, seperate from its members, from the moment it is registered.

The Companies Act, 2008 has changed the regulatory framework applicable to close corporations. The Companies Act, 2008 also prohibits the registration of any new close corporation after 1 May 2011. Close corporations can be converted to companies, but companies can no longer be converted to close corporations.

Can I register a new close corporation (CC)? No, after the implementation of the new Companies Act (Act 71 of 2008) no CC can be registered and no conversions from Companies to CCs will be allowed.

Introduction

With fewer shareholders and a relaxed corporate structure, a close corporation provides each shareholder with more control over shares. For example, if one owner wants to leave the company, the other shareholders can better control those shares. More freedom.

The primary advantage of a close corporation structure is that it removes many of the formalities that a standard corporation is required to follow. There isn’t a need to hold an annual meeting, for example, because the shareholders are already actively involved in the business.

“When selling a business that is operated in a company or close corporation, the sale can either be structured as the sale of the business out of the company or CC, or the sale of the shares/member’s interest in the company or CC.

A close Corporations may, in terms of item 2 of Schedule 2 of the Companies Act , 2008 convert into a profit company having shares, i.e. a private company, a public company or a personal liability company.

A close corporation is a corporation whose ownership interests, i.e., the shares of the corporation, are not available for exchange on any public market. A privately held company is called a “close” company because its shares are “closely held”.

Closed corporations are also known as privately held companies, family corporations, or incorporated partnerships, among other names.

Generally speaking, a close corporation cannot have more than a particular number of shareholders–between 30 and 35 is the limit in most states. A close corporation cannot make a public offering of its stock.

A close corporation is a legal entity much like a company. A CC is run and administered by its members, who must be natural persons (i.e. not other legal entities). A close corporation’s members are like a company’s shareholders.

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The law defines a close corporation as: “Notwithstanding the foregoing, a corporation shall not be deemed a close corporation when at least two-thirds (2/3) of its voting stock or voting rights is owned or controlled by another corporation which is not a close corporation within the meaning of this code.

There must be a minimum of two shareholders, and no maximum number. For directors, if any, the minimum number is three, while there is no maximum number. For officers, the minimum number is two, and there is no maximum number.

States allowing statutory close corporations

To form a close corporation in California, you must file Articles of Incorporation with the California Secretary of State. Incorporation include a provision that all of the corporation’s issued shares of all classes will be held of record by not more than a specified number of persons, not exceeding 35.