Forms of ownership
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Business Studies- Grade 10
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Forms of ownership
- 1. FORMS OF OWNERSHIP BUSINESS STUDIES GRADE 10 CHAPTER 9 1
- 2. DIFFERENT FORMS OF OWNERSHIP Sole Proprietor Partnership Close Corporation Companies (Private & Public) 2
- 3. SOLE PROPRIETOR • Single owner- 100% ownership. • Start up capital is provided by the owner. • Easy to start- No legal processes to follow. • Responsible for all the business decisions (day to day operations). • Unlimited liability- Owner cannot be separated from the business debts. Pie chart showing 100% ownership of business. 3
- 4. SOLE PROPRIETOR 4 Advantages • Owner is entitled to all the profits. • Easy to establish. • Business can be dynamic and flexible. Disadvantages • Unlimited liability. • Restricted growth due to the lack of capital. • Difficult in attracting high skilled employees as compared to large companies.
- 5. PARTNERSHIP • Can have two to twenty partners. • Shared responsibilities among the owners. • Jointly liable for all the business operations. • Partners can either contribute capital or skills and knowledge to the business. • Each partner is responsible for his/her tax payments. Pie chart showing two or more partners. 5
- 6. PARTNERSHIP Advantages • Put skills and knowledge collectively in making decisions. • Shared workload and responsibilities. • Partners can bring in extra partners. Disadvantages • Jointly liable for all the business debts. • Different personalities and views of partners can lead to conflict. • Partners might not all contribute equally. 6
- 7. COMPANIES There are two types of companies; Private and Public Companies 7
- 8. PRIVATE COMPANY • Can have between one to fifty members. • Must be registered with the Registrar of Companies. • Must end with (Pty) Ltd at the end. • Does not offer shares to the public. • It is a legal separate entity. Absa falls under one of the biggest South African Private companies. 8
- 9. PRIVATE COMPANY Advantages • Pays less tax. • Limited liability- Shareholders have no legal implications. • There are long-term growth opportunities. Disadvantages • Requires a lot of capital. • More shareholders= Less profit. • Profits are not evenly divided. 9
- 10. PUBLIC COMPANY • Has at least seven shareholders. • Must have at least two directors. • Offers stock and shares to the general public. • Shares are bought through the Johannesburg Securities Exchange (JSE). • Company name must end in “Ltd” (Limited). TRANSNET falls under South African Public Companies. 10
- 11. PUBLIC COMPANY Advantages • Has its own legal entity. • Easy to raise funds for growth. • Shareholders are able to buy and sell shares freely. Disadvantages • Stocks have to be traded publicly. • A report is submitted to shareholders annually. • Costly- Has high set up costs in terms of legal fees and taxes 11
- 12. CLOSE CORPORATION • Owned by “members” and can have up to ten members. • The name must end with ‘cc’ at the end e.g. Jones and Associates cc. • A cc is a legal entity. • Must be registered with the Registrar of Companies. • Can exist until it is closed. 12
- 13. CLOSE CORPORATION Advantages • Has a legal entity- Its own trading name and assets. • Limited Liability- Members are not legally implicated. • Members receive profits according to their percentage hold. Disadvantages • Restricts long-term growth as it only allows a maximum of ten members. • Members are individually taxed. • Double taxation- Personal and company tax are paid separately. 13
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- 15. REFERENCE LIST Parrc. (2011). Forms of ownership. Available from Slideshare at https://www.slideshare.net/parrc/business-ownership-8829066 Culjat, R. (2013). Bad good powerpoint. Available from Slideshare at https://www.slideshare.net/rculjat/bad-good-powerpoint-22773180 Sibiya, S. (2014). Forms of ownership. Available from Slideshare at https://www.slideshare.net/201285363/forms-of-ownership Sambo, H, N. (2014). Forms of ownership. Available from Slideshare at https://www.slideshare.net/nonkululekoS/forms-of-ownership-32065666 Johnson, N. (2015). Forms of ownership. Available from Slideshare at https://www.slideshare.net/NatJohnson/forms-of-business-ownership-43144933 Business Studies Grade 10 CAPS Platinum textbook 15
- 17. SOURCES- IMAGES CONTINUED https://images.app.goo.gl/DVEYqRbHuQZi5EHGA https://images.app.goo.gl/T64ooKo1A5drxHu6 https://images.app.goo.gl/SdTzkXBRGsJDW1cCA Image CC JH and Co- Found on Google from www.jhco.co.za Image: Valuing assets in a Sole Proprietorship- Found on Google from peakbusinessvaluation.com Image: Public vs. Private Companies- Investor Academy- Found from Google from investoracademy.org 17