INCORPORATION OF A COMPANY

Registration Procedures

Before the company is formed, the proposed name is reserved. The name of a private company must end with the words "(Proprietary) Limited" or the abbreviation "(Pty) Ltd". A public company's name must end with the word "Limited" or "Ltd". Certain other specified conditions must be satisfied with respect to the selection of a name.

A company is formed by filing its memorandum of association and articles of association, together with certain specified forms, with the Registrar of Companies in Pretoria. The memorandum of association includes the company's name, its primary objective, its authorised capital and the names and signatures of the subscribers. Every company has full powers, unless the memorandum provides for restrictions and exclusions.

The articles of association are the company's bylaws. The Companies Act includes a model set of articles, but in practice an attorney prepares the articles. A private company's articles of association must include certain specified restrictions.

In general, accounting firms, such as Ernst & Young, initiate and coordinate the process of forming a company and arrange for the performance of the subsequent formalities, such as the establishement of registers, preparation of initial minutes, issuance of share certificates and the filing of statutory registrations.

Time Required

Registration takes approximately one week, but additional time must be allowed for approval of the name, which could require an additional week.

Incorporation Fees

The cost of forming a company is approximately Rs. 2,000.

ACQUISITION OF REAL ESTATE

Foreign developers have started moving in with significant projects. They see enormous potential in industrial property development (with South Africa being the obvious launch pad into sub-Saharan Africa), huge office development potential as Black empowerment proceeds, and a significant opportunity for retail development in the former Black areas.

Opportunities in the leisure and recreation markets abound as the tourism market is still, by world standards, relatively undeveloped. Domestic tourism, a relatively new concept for the local Black community, is largely untapped.

By world standards property rentals are low, allowing for significant upward movement. Land prices are still attractive and the local construction industry is geared to handle any size project. An active and efficient property market exists which deals in residential and commercial property, plus agricultural land. Estate agents facilitate this market as does a thriving property finance sector, dominated by banks and building societies.

Land is zoned for different purposes, with substantial quantities zoned for industrial purposes.

LAND AND PROPERTY

DEVELOPED LAND

All developed land is divided into identifiable plots, Virtually all land is held on Freehold Title. The Deeds Office (part of the Land and Regional Affairs department) holds copies of the registration of freehold title of each property in each province. The Surveyor General's office has a detailed diagram showing the extent and co-ordinates of each stand any servitudes or easements that may affect the stand.

MULTI UNIT OWNERSHIP

Sectional Title : The first Sectional Titles Act of 1971 came into operation in 1973. This Act made it possible for a person to acquire registered title over buildings on a vertical basis. This concept introduced ownership of a section or part of the building coupled with joint ownership of the common property being the land, lifts, stairs, passageways etc.

Share Block : Also controlled by legislation, the Share Block Control Act provides occupation rights over a unit in a multi-tenanted building through the ownership of shares in the property owning company.

Certain state and local authority owned land may be leased on long leases to industrial and commercial end users.

TOWN PLANNING

Each municipality produces a zoning scheme which governs permitted development uses within its area. The municipality also regulates parameters affecting the permissible coverage of a site, the floor area ratio (usually given as a factor which is applied to the site area), building height and/or number of storeys, parking requirements and building lines or set backs.