A close corporation, abbreviated CC, is a simplified business entity that South African law allowed to be formed until 2011. Existing CCs continue, owned by members instead of shareholders.
What it means
The CC matters to payroll through classification. A CC itself, where it receives income, is a nature-of-person type distinct from a natural person, and a member of a CC is treated like a company director for tax - a specific nature-of-person code with its own PAYE rules. Whether a person is a CC member, an employee or an independent contractor changes how their pay is taxed.
Where it fits in
When payroll sets up a person or entity, the nature of person determines the tax treatment, and CC and CC-member are among the options. Getting this right governs whether standard PAYE, a director calculation or another treatment applies.
Key rules
- A pre-2011 South African business form, owned by members not shareholders.
- A CC is a nature-of-person type separate from a natural person.
- A CC member is taxed like a company director under the relevant code.
- New CCs can no longer be registered, but existing ones remain valid.
