Close corporation

Question 1

Name for close corporation

Answer 1

Must end in cc

Question 2

Number of owners for close corporation

Answer 2

1-10 members

Question 3

Management for close corporation

Answer 3

All members are involved in the management

Question 4

Legal requirements for close corporation

Answer 4

Audit of financial statements

Regular annual general meetings

Question 5

Liability for close corporation

Answer 5

Members have limited liability unless the cc has 6months or more than 10 members

Question 6

Legal personality for close corporation

Answer 6

Has a legal personality

Question 7

Continuity for close corporation

Answer 7

Unlimited continuity

Question 8

Capital for close corporation

Answer 8

Each member contributes certain assets/ services to the corporation

Question 9

Profit-sharing for close corporation

Answer 9

Profits are shared in proportion to the interest of the member

Question 10

Taxation for close corporation

Answer 10

Pay tax on the profits of the business and declared dividends of members

Question 11

Advantages of Close corporation

Answer 11

Limited liability
Legal personality and continuity
Easy and cheap to establish

Question 12

Disadvantages of Close corporation

Answer 12

Capital limited to 10 members
Decisions take time
Could lead to conflict