Shareholders, directors — and why share certificates matter
When registering a private company in South Africa, one of the first things you’ll encounter are terms like shareholder, director and share certificate. But what do they actually mean — and why are they important for your business?
Shareholder vs director
These are two different roles, even when the same person holds both.
- A shareholder owns the company. Shares represent ownership, and shareholders share in the company’s profits (through dividends) and ultimately in its value.
- A director runs the company. Directors are responsible for managing it, making decisions and meeting the company’s legal duties under the Companies Act.
In a small business, you’re often both — owner and manager. But the roles carry different rights and responsibilities, and it’s worth understanding the distinction, especially when you bring in partners, investors or family members.
What a share certificate is
A share certificate is the document that proves who owns shares in the company, and how many. It records the shareholder’s name, the number and class of shares, and the date of issue.
Under the Companies Act, a company must issue a certificate to each shareholder and maintain a securities register recording its shareholders. These aren’t just formalities:
- They are the proof of ownership if a dispute ever arises.
- Banks, investors and buyers will ask for them during finance applications and due diligence.
- They keep your statutory records in order — which matters for CIPC compliance and for the eventual sale or transfer of the business.
Don’t leave it until you need it
Many owners only discover their share certificates and registers are missing or out of date when a bank or buyer asks for them — at the worst possible moment. Getting them issued and your securities register maintained from the start saves a scramble later.
We can issue your share certificates and keep your statutory registers current as part of our company secretarial service. Get in touch to sort it out.