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    Forms of Ownership Summary

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    Carina Weideman Bruijns
    This document summarizes different forms of business ownership, including sole traders, partnerships, closed corporations, private companies, and public companies. Sole traders are individual business owners who are solely responsible for debts and have no business continuity. Partnerships involve two or more owners who have unlimited liability for debts and no legal personality. Closed corporations have 1 to 10 members who have limited liability and legal personality. Private and public companies also have limited liability and legal personality, but public companies can raise capital by selling shares to the public.

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    Forms of Ownership Summary

    Uploaded by

    Carina Weideman Bruijns
    18 views2 pages
    This document summarizes different forms of business ownership, including sole traders, partnerships, closed corporations, private companies, and public companies. Sole traders are individual business owners who are solely responsible for debts and have no business continuity. Partnerships involve two or more owners who have unlimited liability for debts and no legal personality. Closed corporations have 1 to 10 members who have limited liability and legal personality. Private and public companies also have limited liability and legal personality, but public companies can raise capital by selling shares to the public.

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    This document summarizes different forms of business ownership, including sole traders, partnerships, closed corporations, private companies, and public companies. Sole traders are individual business owners who are solely responsible for debts and have no business continuity. Partnerships involve two or more owners who have unlimited liability for debts and no legal personality. Closed corporations have 1 to 10 members who have limited liability and legal personality. Private and public companies also have limited liability and legal personality, but public companies can raise capital by selling shares to the public.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    18 views2 pages

    Forms of Ownership Summary

    Uploaded by

    Carina Weideman Bruijns
    This document summarizes different forms of business ownership, including sole traders, partnerships, closed corporations, private companies, and public companies. Sole traders are individual business owners who are solely responsible for debts and have no business continuity. Partnerships involve two or more owners who have unlimited liability for debts and no legal personality. Closed corporations have 1 to 10 members who have limited liability and legal personality. Private and public companies also have limited liability and legal personality, but public companies can raise capital by selling shares to the public.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    FORMS OF OWNERSHIP SUMMARY

    SOLE TRADER PARTNERSHIP


    MEANING Individual who owns business Two or more people club in together to
    open a business and is responsible, liable
    and rewarded according to their
    contribution

    OWNERS 1 2 or more
    CAPITAL Owner provides Partners provide

    LEGAL LIABILITY - Unlimited Unlimited, jointly & servereally


    Who is responsible for
    paying debts

    LEGAL PERSONALITY - None None


    Seen as a person
    (contracts, own
    property, sue & be
    sued)

    CONTINUITY - No No
    Business function with
    or without owner's
    presence

    SARS Income Tax on income earned Income Tax on income earned

    ADVANTAGES Quick decisions More money together


    100 % Profit Big % of profit
    All-round experience of functions Sharing of workload

    Personal touch relationships Partners share risks

    No formal docs or legal requirements No formal registration


    Just trading licence Only partnership agreement
    DISADVANTAGES Owner is easily overworked Possible conflict between partners

    Capital is limited Consensual decisions take time

    Owner bears all responsibilities 1 incompetent or dishonest partner


    costs all partners money
    Liable for debt of business Partners liable for debto of business
    No continuity Can pay up to 40 % tax
    FORMS OF OWNERSHIP SUMMARY
    CLOSED CORPORATION PRIVATE COMPANIES PUBLIC COMPANIES
    Small business owners protect their Ownership is private - cannot sell shares to Call on public to buy shares to fund
    personal belongings. CC public (Pty) Ltd business start-up or expansion
    Ltd

    Min 1 & max 10 Called shareholders Min 1 shareholder, no max


    Limited to what members can raise From private shareholders in return for Sourced from public shareholders
    shares of company - limited
    Limited Limited Limited

    Yes Yes Yes

    Yes Yes Yes

    28% & Tax on Net Profit 28% & Tax on Net Profit 28% & Tax on Net Profit
    15 % on personal income earned 15 % on personal dividends earned 15 % on personal dividends earned
    Simplicity Easier to raise capital No limit to number of owners
    Flexibility Suitable for capital-less entrepeneurs Large amount of capital can be raised
    Members can participate in management & Shares are freely transferrable
    control of business
    Registration is easy and cheap Small investors can become part of large
    organisations
    Obtain funds easier than sole prop
    More than 1 person can make decisions
    Consensual decisions take time Number of shareholders are limited to If company fails, it may lead to large
    number of shares unemployment
    The more members, the more likely May not transfer share to public Required to publish certain information
    conflict is that competitors might use against them

    Members can personally be held


    responsible if they act negligent
    Bank might requist audited financials

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