Close Corporations (CCs) were attractive in the past as they had the advantage of incorporation with lower costs and simpler administration, however, it is no longer possible to register CC according to legislation. They were discontinued in order to streamline the differences between CC’s and companies and make the private company a more attractive form of business enterprise, going forward.
CCs are still allowed to carry on business as a CC provided it existed before 1 May 2011, however, there are benefits to converting a CC to a private company.
When you convert a CC to a Private Company the following changes will take place:
– Your company will now have the words ‘Pty (Ltd)‘ at the end of its name instead of ‘CC’.
– The current members will become the Company Directors.
– New directors, that were not a member of the CC, can also be appointed.
– Some or all of the directors will have a number of shares in the company.
– Your company owners will now become shareholders and each will receive a certain amount of shares.