You don't add or remove shareholders "at CIPC". You do it inside the company: new shares are issued to someone, or existing shares are transferred from one person to another. The company then updates its securities register and issues new share certificates. It also has to file its updated beneficial ownership information with CIPC within 10 business days.
This guide explains each route step by step, the documents you need, and the tax points to watch.
Shareholders vs directors: what's the difference?
People often mix these up, and they're changed in completely different ways.
Shareholders own the company. Their names go in the company's securities register, and they hold share certificates.
Directors run the company. They're appointed and removed by resolution, and the change is filed with CIPC. See our guide on how to change company directors.
One person can be both. If you're bringing in a partner who will own part of the business and help run it, you'll usually need to do both processes.
Two ways to add a shareholder
1. Transfer existing shares. An existing shareholder sells or gives some or all of their shares to the new person. The total number of shares in issue stays the same. This is the most common route when a partner buys in from the founder.
2. Issue new shares. The company creates and issues new shares to the new shareholder, usually in exchange for money or assets. Everyone else's percentage goes down (dilution). This is common when an investor puts money into the company.
How to transfer shares, step by step
Check the MOI and any shareholders' agreement. Private companies must restrict the transfer of their shares. Many MOIs give the other shareholders a right of first refusal, or require board approval for a transfer.
Agree the price and terms. Put them in a written sale of shares agreement (or a donation agreement if no money changes hands).
Sign a securities transfer form. The seller (transferor) and buyer (transferee) both sign it.
Board resolution. The directors approve the transfer and authorise the new share certificate. See our guide to board resolutions.
Cancel the old certificate and issue a new one. The seller's original share certificate is cancelled. A new certificate is issued to the buyer. If the seller keeps some shares, a balance certificate is issued to them. Read more about share certificates.
Update the securities register. Record the transfer, the date, the number of shares and the new holder.
Pay securities transfer tax (STT). See the tax section below.
File updated beneficial ownership information with CIPC within 10 business days.
How to issue new shares, step by step
Check the authorised shares. The MOI sets how many shares the company may issue. If there aren't enough authorised but unissued shares, the shareholders must first pass a special resolution to amend the MOI, and the amendment must be filed with CIPC. See changing share capital at CIPC.
Offer the shares to existing shareholders first, if required. In a private company, existing shareholders generally have a pre-emptive right to take up new shares in proportion to their holdings, unless the MOI says otherwise. Get them to waive it in writing if they don't want the shares.
Board resolution to issue the shares. It should set out the number and class of shares and the price (the "consideration"). Shares issued to directors or people related to them usually need a shareholders' special resolution as well.
Receive payment. Shares may only be issued once the company has received the agreed consideration, or under a properly structured agreement.
Issue the share certificate and update the securities register.
File updated beneficial ownership information with CIPC within 10 business days.
If you have more than one type of share, read about classes of shares first.
How to remove a shareholder
A shareholder can only leave if their shares go somewhere. Usually one of these happens:
Another shareholder or a new person buys them. Follow the transfer steps above.
The company buys them back. A share buyback needs a board resolution. The company must also pass the solvency and liquidity test, meaning it must still be able to pay its debts after paying the shareholder. In some cases a shareholders' special resolution is required too. Get advice before doing this.
The shareholder dies. The shares form part of their estate, and the executor transfers them to the heirs or sells them.
You can't simply "remove" someone's name from the register without their shares being transferred or bought back. Doing that can expose the company and its directors to a claim.
Documents checklist
Sale of shares or donation agreement
Securities transfer form, signed by both parties
Board resolution (and a special resolution where required)
Written waiver of pre-emptive rights (for new share issues, if applicable)
Cancelled original share certificate
New share certificate(s)
Updated securities register
Proof of STT payment (for transfers)
CIPC beneficial ownership filing confirmation
If your company's securities register was never kept or has gone missing, you'll need to rebuild it first. See how to reconstruct a securities register, or use our free securities register generator.
Filing beneficial ownership with CIPC
Since 2023, companies must keep their beneficial ownership information up to date on CIPC. A beneficial owner is any individual who ultimately owns or controls 5% or more of the company, directly or through another company or trust. When shareholding changes, the company must file the updated information within 10 business days. Until it does, CIPC can block other filings, including annual returns.
Smartbook can do this filing for you. See beneficial ownership filing.
Tax points to watch
These are the main tax consequences. Every situation is different, so speak to your accountant before signing anything.
Securities transfer tax (STT): 0.25% of the value of the shares transferred. For unlisted shares, the company is liable to pay it to SARS (it can recover it from the buyer). Payment is due within two months after the end of the month in which the transfer happened. STT doesn't apply when the company issues new shares, only on transfers.
Capital gains tax (CGT): If the seller sells for more than they paid, the gain may be taxable in their hands.
Donations tax: If shares are given away, or sold well below market value, donations tax may apply to the giver.
Valuations: Transfers between family members or connected persons should be at market value. Keep a record of how the price was worked out.
Get it done properly
Share changes are easy to get wrong. If the paperwork doesn't match, it tends to come up at the worst time: when you sell the business, apply for funding or fall out with a partner.
Smartbook can prepare your share certificates, update your securities register and file your beneficial ownership with CIPC.
Frequently asked questions
Does CIPC keep a list of shareholders? Not the way it keeps a list of directors. The company keeps its own securities register. CIPC receives beneficial ownership information and, in some cases, a copy of the securities register as part of that filing.
How long does it take to add a shareholder? The internal paperwork can be done in a few days once everyone has signed. The beneficial ownership filing must follow within 10 business days of the change.
Do I need to pay STT if I give shares to my spouse? STT is based on the transfer, not on whether money changes hands, so it generally still applies. There are some exemptions. Check with your accountant.
Can a shareholder be forced out? Only if the MOI or a shareholders' agreement allows it, for example a compulsory sale when a shareholder leaves the business. Otherwise the shareholder has to agree to sell.
Can a foreigner be a shareholder in a South African company? Yes. There are no general restrictions on foreign shareholders in a private company, but exchange control rules apply to the money flowing in and out. Your bank will need the share certificates endorsed "non-resident".