CAN SAICA MEMBERS REGISTER A PRIVATE COMPANY TO PERFORM SERVICES AS ACCOUNTING OFFICERS FOR CLOSE CORPORATIONS

CAN SAICA MEMBERS REGISTER A PRIVATE COMPANY TO PERFORM SERVICES AS ACCOUNTING OFFICERS FOR CLOSE CORPORATIONS

The Close Corporations Act, no 69 of 1984 has specific requirements for an accounting officer and states that a corporation may appoint as its accounting officer: 

  • Any person who is a member of a recognised profession as listed, which includes Chartered Accountants (SA) “(CA(SA))” and Associate General Accountants (SA) (AGA(SA))
  • A firm as defined in subsection (1) of the Public Accountants’ and Auditors’ Act, 1991, (Act No. 80 of 1991) (superseded by the Auditing Profession Act, No 26 of 2005);
  • Any other firm, if each partner in the firm is qualified to be so appointed; or
  • Any other corporation, if each member of such corporation is qualified to be so appointed. 

The act also states that the liability of a partner in respect of debts and liabilities incurred by a firm contemplated during the partner’s period as a partner and the liability of a member in respect of the debts and liabilities of a corporation during the member’s period as a member may not be excluded by operation of law or in any other way.

The Close Corporations Act therefore allows for a CA(SA)/AGA(SA) (sole practitioner), partnership, close corporation and a firm as defined in the Auditing Profession Act (APA) to be appointed as an accounting officer. 

A firm is further defined by the APA as a sole proprietor or incorporated company (i.e. personal liability company) or a partnership. Therefore a private company is not included in the definition of firm. 

SAICA members are requested to consider the above when setting up a new private company or other type of entity to ensure that they meet the requirements of relevant legislation with respect to providing certain types of professional services, including the capacity in which they will be providing those services. 

Reference: 

Small and Medium Practice Newsletter – 1st Quarter 2016