4 min read · Updated 2026
Types of business in South Africa: which to choose
The main types of business in South Africa compared: sole proprietor, partnership, (Pty) Ltd, non-profit company and close corporation — and which suits you.
Quick answer
Most small businesses in South Africa are either sole proprietors (one person, no registration) or private companies ((Pty) Ltd, registered with CIPC). Partnerships, non-profit companies (NPCs) and existing close corporations (CCs) are the other common types.
The main types
- Sole proprietor — one owner, no CIPC registration, personal liability
- Partnership — two or more people sharing profit under a partnership agreement; no separate legal person
- Private company (Pty) Ltd — separate legal person, limited liability, CIPC registration
- Personal liability company (Inc.) — used by some professions such as attorneys
- Non-profit company (NPC) — for social, cultural or charitable purposes
- Close corporation (CC) — no new CCs can be registered since 2011, but existing ones continue
How to choose
- Testing an idea or freelancing alone: sole proprietor
- Going into business with someone: (Pty) Ltd with a shareholders' agreement is usually safer than a partnership
- Bigger clients, tenders or risk: (Pty) Ltd
- Charity or community work: NPC
Frequently asked questions
Can I still register a close corporation?
No. New CCs haven't been registered since the Companies Act 71 of 2008 took effect in 2011. Existing CCs can continue.
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General information only, based on South African legislation as of 2026. Confirm your situation with a registered tax practitioner or attorney.