Companies & Other Entities Buying or Selling Property

A registered private company — typically ending in Proprietary Limited or (Pty) Ltd — is recognised as a legal person entirely separate from its shareholders and directors. This means a company can own immovable property in its own name, just as any individual can. But that independence comes with its own set of formalities.

When a director signs documents on behalf of the company — whether a power of attorney or a deed of transfer — their full name, their capacity as director, and a reference to the authorising resolution must all appear in the document. The conveyancer shoulders personal legal responsibility for verifying that the signatory is genuinely empowered to act.

The Companies Act 71 of 2008 allows a person to sign a sale agreement as representative of a company still to be incorporated. Once the company exists, its board has three months to ratify, partially ratify, or reject the contract. If the board does nothing within that window, the agreement is deemed ratified automatically. The catch? The representative who signed remains personally liable if the company is never registered, or if it rejects the contract — so the sale agreement must always contain a clause reflecting this personal liability.

What happens when a company buys and title is registered? The property vests in the company as a juristic person — not in any individual shareholder or director. This distinction matters enormously at resale time, because the company itself must authorise any future disposal.

Unlike an individual who can simply sign documents, a company can only act through its authorised human representatives. Before any transfer can proceed, the conveyancer must have proof — in writing — that the person signing on the company's behalf has been properly authorised to do so.

That proof takes the form of a resolution — a formal written record of a decision taken by the board of directors or members, specifying what was approved and who may sign. In practice, the conveyancer's office typically drafts this document for the company's directors to adopt and sign. It records that the board has approved the specific transaction and designates a named individual to execute all related documents.

In addition to the resolution, where the selling entity is a company, the conveyancer will also prepare a company certificate — a separate document completed by the authorised representative and then verified by the company's accounting officer or auditor. This certificate confirms, among other things, that the company is solvent and that the transaction is authorised.

The Close Corporation was a popular vehicle for small business ownership in South Africa for decades. Although no new CCs can be formed after 1 May 2011 (when the Companies Act 71 of 2008 came into full operation), thousands of existing close corporations continue to own property throughout the country — and they continue to buy and sell.

A CC is identified in transfer documents with its full name followed by the letters CC and a registration number in the format YYYY/NNNNNN/23. The last two digits (/23) indicate it is a close corporation.

Just as with a company, the member who signs the power of attorney on behalf of the CC must be duly authorised. A resolution signed by all members (or the relevant members, as their association agreement may provide) is prepared and kept on file. The CC certificate is similarly prepared and verified by the CC's accounting officer.

When a company or CC is placed under liquidation — whether voluntarily or by court order — its property does not simply disappear. Instead, a liquidator is formally appointed to take charge of the entity's estate, sell its assets, and distribute proceeds to creditors. Property owned by the company at the time of liquidation typically forms part of what must be sold.

Whether the liquidation happened before or after 1 May 2011, the Deeds Registry requires that the words "in liquidation" or "in voluntary liquidation" appear alongside the company's name in all transfer documents. This alerts everyone — including the buyer — to the company's status. Chief Registrar's Circular 28/2013 confirmed this requirement extends to all liquidations under the current Companies Act as well.

Business rescue is a concept introduced by the Companies Act 71 of 2008. Unlike liquidation — which signals the end of a company — business rescue aims to turn things around. A business rescue practitioner (BRP) takes over management of the financially distressed company and works toward either rescuing it as a going concern or, if that proves impossible, achieving a better outcome for creditors than immediate liquidation would have.

During business rescue proceedings, the BRP has significant powers — including the authority to sell or otherwise dispose of the company's property where doing so serves the rescue plan or the interests of creditors.

The business rescue practitioner may be appointed in one of two ways — by the company's own board of directors under section 129(3)(b) of the Companies Act, or by a court order under section 131(5). The power of attorney must reflect which route was used, and must reference the notice of appointment filed with the CIPC (Companies and Intellectual Property Commission).

Non-profit organisations and non-profit companies are not exempt from the property transfer system. Whether it is a charity, a welfare organisation, a religious body, a sports club, or a welfare trust, these entities frequently own real estate — and the rules around their transfers are specific.

For churches and similar unincorporated bodies, representatives typically sign together — naming themselves by capacity (for example, as chairperson and secretary) and referencing the resolution of the governing body that authorised them to act. The conveyancer verifies both the resolution and a certified copy of the organisation's constitution to confirm that the property transaction is within the entity's powers.

South Africa is open to foreign investment in real estate, and foreign-incorporated companies do buy property here. The rules around how they are described in transfer documents are specific — and non-compliance results in the deed being rejected at the Deeds Office.

A share block scheme is a form of property use arrangement — one of the older property structures in South African law — where a company owns a building outright, and individual "owners" hold shares in that company rather than registered title to specific units. Each share carries a linked right, set out in a use agreement, to occupy a particular portion of the building. The Share Blocks Control Act 59 of 1980 governs these arrangements.

This is the critical distinction between a share block and sectional title. In sectional title, you hold a registered real right to your unit. In a share block, your right of use flows from your shares — meaning the company's constitution, its loan obligations, and its share register all affect your practical position as an "owner". The unit is not registered in your name at the Deeds Registry; the building is registered in the name of the company.

Converting a Share Block to Sectional Title

Many share block schemes have been, or are in the process of being, converted to sectional title — giving individual "shareholders" registered title to their units. This conversion is a significant legal process but can offer meaningful benefits: