Transfer Property into a Company – Purchasing or transferring property into a company’s name is a strategic move for many business owners and investors. Whether it’s for asset protection, tax benefits, or business expansion, structuring property ownership under a company requires careful legal and financial consideration.
In this blog, we’ll walk you through the key steps of transferring property into a company and highlight crucial compliance aspects—without overwhelming you with legal jargon.
Transfer Property into a Company Why?
Many business owners choose to own property through a company rather than as an individual. Some common reasons include:
- Limited Liability Protection – Separating personal and business assets reduces personal risk.
- Tax Efficiency – A company structure can offer tax advantages, such as deductible business expenses.
- Easier Succession Planning – Transferring ownership within a company is often simpler than dealing with individual property ownership.
- Financing Opportunities – Companies with solid financials may find it easier to secure business loans using property as collateral.
Key Steps to Transfer Property into a Company
1. Confirm Company Details & Compliance Status
Before transferring property, you need to ensure that the company is legally registered with the Companies and Intellectual Property Commission (CIPC) and that its records are up to date. A certificate for transfer to a company needs to be done. This includes:
- Verifying the company’s registration status with CIPC.
- Ensuring that no amendments have been made to the Memorandum of Incorporation (MOI) that affect authority to purchase property.
- Checking if any directors or shareholders hold more than 25% shares (important for regulatory compliance).
2. Verify Exchange Control & Regulatory Compliance
The South African Reserve Bank regulates foreign ownership and control of companies. If 75% or more of the company’s capital, voting power, or assets are controlled by non-residents, Exchange Control approval may be required.
Additionally, it’s important to confirm that:
- The company is not a share block company (which requires different legal treatment).
- The transaction complies with the Companies Act (Sections 44, 45, 46, 75, or 112) to avoid any legal disputes.
- Section 44: Ensures that any financial assistance provided for share acquisition is approved by shareholders and does not pose a risk to the company’s solvency.
- Section 45: Regulates financial assistance to directors and related parties, ensuring the company is not unlawfully lending or providing guarantees.
- Section 46: Ensures that company distributions (including share buybacks) meet solvency and liquidity requirements.
- Section 75: Prevents conflicts of interest where directors have a personal financial stake in the transaction.
- Section 112: Governs major asset transactions, requiring special approvals to protect the interests of shareholders and creditors.
3. Prepare the Necessary Resolutions & Authorizations
Company directors must formally approve the purchase or transfer of the property. This means:
- A Board Resolution must be passed authorizing the transaction.
- Directors need to ensure that no personal financial interest (conflict of interest) invalidates the transaction under Section 75 of the Companies Act.
- If financial assistance is required for the purchase, it must comply with Sections 44 & 45, ensuring the company is not providing unlawful loans or guarantees.
4. Conduct Financial & Solvency Checks
To prevent legal complications, the company must:
- Be financially solvent and not in business rescue or liquidation.
- Have directors who are not personally insolvent (as this may impact their ability to sign contracts).
- Ensure that funds used for the transaction do not contravene financial assistance regulations.
5. Engage an Auditor or Independent Reviewer
An auditor or independent reviewer plays a critical role in confirming the legitimacy of the transaction. Their tasks include:
- Verifying CIPC confirmations.
- Checking the minute book for resolutions.
- Ensuring compliance with exchange control and financial regulations.
They will issue a Factual Findings Report, confirming that the property transfer meets legal and financial requirements.
6. Proceed with the Transfer via a Conveyancer
A registered conveyancer is responsible for handling the legal transfer of property to the company. They ensure:
- The Deeds Office records the transfer correctly.
- All taxes and transfer duties are paid.
- Compliance with property laws is maintained.
Once all approvals are in place, the property is officially registered under the company’s name.
Common Pitfalls to Avoid
- Not updating company records – Ensure director and shareholder details are current.
- Overlooking tax implications – There may be Capital Gains Tax (CGT) or Transfer Duty costs.
- Skipping compliance checks – Ignoring financial and legal compliance can delay or invalidate the transaction.
- Poor structuring – A property-holding company should be properly structured to avoid unnecessary liabilities.
Final Thoughts
Transferring property into a company can be a smart move for business owners looking to structure their assets strategically. However, it requires careful compliance with legal, financial, and tax regulations.
By following the right process and working with experienced professionals (conveyancers, auditors or independent reviewers, and legal advisors), you can avoid costly mistakes and enjoy the benefits of corporate property ownership.
