The Different Marriage Regimes and Business Entitie

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June 3, 2020
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July 7, 2020

THE DIFFERENT MARRIAGE REGIMES AND BUSINESS ENTITIES

  1. Married persons
    1. Marriage in community of property
      1. This is the default regime in our law. It will automatically apply where parties do not conclude an antenuptial contract (ANC) in front of a notary public, irrespective of whether this is the couples’ intention or not.
      2. The effect of marriage in community of property is that on marriage, a joint estate is formed that consists of each spouse’s respective assets and liabilities as they were before marriage. 
    2. Marriage out of community of property
      1. Community of property and community of profit and loss are excluded. 
      2. Each spouse retains control and ownership of his/her own assets without the interference or control of the other spouse. The estate of each spouse consists of all the assets he/she owned prior to marriage and any asset acquired by each spouse after marriage. 
    3. Common law marriage 
      1. There is no assumption of marriage in South African law in consequence of cohabitation regardless of the duration of the relationship.
      2. If parties have cohabited and they can prove that a universal partnership exists between them, all property of such a partnership is deemed to be jointly owned by the parties and debts are the joint liability of the parties.
  2. THE DIFFERENT BUSINESS ENTITIES FOUND IN SOUTH AFRICA
    1. SOLE PROPRIETOR
      1. Also known as a sole trader. It is simply that you start trading as yourself. For example, you could fix people’s cars for which they pay you personally. 
    2. PRIVATE COMPANY (PTY (LTD))
      1. This entity is separate from you personally. It will have the owners (shareholders) who may be one or more persons who own the company and the managers (directors) who run the company. Sometimes these are the same people, but not necessarily. 
    3. CLOSE CORPORATION (CC)
      1. Also known as a cc. This form of business has been discontinued and is no longer an option if you are only starting now. CCs that existed before 2011 can continue to exist, but no more are being registered. 
      2. Very much the same as a Pty Ltd, but with only 10 members.
    4. PERSONAL LIABILITY COMPANIES (INC.)
      1. These companies are business entities in which both current and previous directors may be held personally jointly and severally liable for any debts and liabilities that occur during their time in office. 
      2. This form of business enterprise is most often used for firms of professionals, such as doctors, lawyers and accountants. For example, Joe Soap’s accounting firm, Soap, Smit and Sithole, Inc.
    5. PUBLIC COMPANIES (LTD.)
      1. Public companies are formed to raise funds by offering shares to the public and there is no limit to the number of shareholders. 
      2. These companies are business entities that issue shares, and are often listed on a stock exchange. 
    6. STATE-OWNED COMPANIES (SOC)
      1. State-owned companies are business entities, which are either state-owned, like Metrorail, or owned by a municipality, like eThekwini Electricity.
    7. TRUSTS
      1. In South Africa, there are basically two types of trusts, namely, inter vivos trusts and testament trusts (also known as a mortis causa trust). Inter vivos is usually an investment trust setup while the trustor is still alive to manage the trust fund for the beneficiaries. 
    8. PARTNERSHIP
      1. It is simply that you start trading with someone else under a name. For example, you and your friend could fix people’s cars for which they pay you. You need not to register your partnership.

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