Quick answer: A personal liability company is a company whose name ends in "Incorporated" or "Inc.". Its directors, and past directors, are jointly and severally liable with the company for its debts and liabilities that arose during their terms of office. It's mainly used by professionals, such as attorneys and some accountants and engineers, whose professional body requires or allows it. You register it with CIPC using a customised MOI, which CIPC processes manually rather than through the instant online route.
How a personal liability company works
An Inc. is a profit company, like a (Pty) Ltd, with one important difference: the MOI states that it's a personal liability company. As a result:
directors are personally liable, together with the company, for debts and liabilities contracted while they were directors;
past directors remain liable for debts that arose during their time in office;
in every other respect, the company runs much like a private company.
Who uses an Inc.?
Personal liability companies are mostly used by professional practices where the professional's personal accountability matters, for example:
law firms (many attorneys practise through an Inc.);
some accounting, auditing and engineering practices;
other professions where the regulator's rules allow or require it.
CIPC itself recommends that professionals first check with their regulatory or professional body which type of entity they may practise through.
Inc. vs (Pty) Ltd
| Personal liability company (Inc.) | Private company – (Pty) Ltd | |
|---|---|---|
| Name ending | "Incorporated" / "Inc." | "(Pty) Ltd" |
| Directors' liability for company debts | Jointly and severally liable with the company for debts during their term | Generally not personally liable, except in specific cases |
| Typical users | Professional practices | Most businesses |
| MOI | Must be customised | Standard or customised |
| Registration | Manual CIPC process | Can be registered online |
How to register a personal liability company
Check your professional body's rules. Confirm that an Inc. is the right (or required) entity for your practice.
Reserve the name with CIPC. It must end in "Incorporated" or "Inc." See our company name reservation guide.
Prepare a customised MOI that states the company is a personal liability company and sets out the rules for directors and shareholders.
Submit the registration to CIPC with the customised MOI and supporting documents. Registrations with customised MOIs are processed manually, so allow extra time.
Pay the CIPC fees and wait for the registration certificate.
Register for tax and set up your practice's bookkeeping, trust accounts where required, and professional body registrations.
Can a Pty Ltd convert to an Inc.?
Yes. An existing private company can convert by amending its MOI (special resolution and CoR15.2) and changing its name to end in "Inc.". Directors should understand the personal liability they're taking on before they convert.
Tax and accounting
A personal liability company is taxed like any other company. It files company tax returns, provisional tax and, where applicable, VAT and payroll returns. Professional practices often have extra requirements, such as trust accounting for attorneys, so proper monthly bookkeeping is essential.
Frequently asked questions
Are directors of an Inc. liable for all company debts?
They're jointly and severally liable with the company for debts and liabilities contracted during their terms of office.
Can I register an Inc. online?
Not through the instant online route. Because it needs a customised MOI, CIPC processes it manually.
Is an Inc. taxed differently from a Pty Ltd?
No. It's taxed as a company.
Do I need an Inc. to practise as an accountant?
It depends on your professional body's rules. Check with your body first.
Setting up a professional practice?
Smartbook can register your company, coordinate the customised MOI, and set up your practice's bookkeeping, tax and payroll from day one. Email hello@smartbookie.co.za or contact us.
Last reviewed: 2 October 2026. General guidance, not legal advice. Consult your professional body and a commercial attorney on your practice structure.