This document discusses different types of business organizations in South Africa, including sole proprietorships, partnerships, private limited companies, and close corporations. It outlines the key advantages and disadvantages of each structure. Sole proprietorships have advantages like no required registration and sole ownership of profits, but the owner is personally liable for all debts. Partnerships allow for shared profits but also shared personal liability for debts. Private limited companies and close corporations provide liability protections but have membership limits and other requirements. Understanding the pros and cons of each structure is important for competitive business planning.

1. New Venture
Creation
NQF LEVEL 2
COMPILED BY NS HLONGWANE

2. Topic 1
Demonstrating and understanding of a selected business environment

3. Introduction
This topic will explore different types organisations,
advantages as well as disadvantages of those types of
organisations.
The topic will also explore how to be competitive in a
business environment. SWOT analysis will be used to
analysis the business standing in the market.
Another factor will be a look on the legal and
professional regulations which a business will have to
adhere to

4. Module 1
Explaining the structure and roles of different types of
organisations within their own industry in South Africa

5. Unit 1.1 Types of organisations
Sole trader/ Sole proprietor: Owned and managed by One person
Partnership: 2 – 20 partners
Company : Public Company (Ltd)- minimum of
7 to unlimited shareholders (not for level 2 )
: Private limited company (Pty Ltd) - 1-50 shareholders
Close corporation(CC):1- 10 members

6. Advantage and
disadvantages
Business Structure

7. Sole trader
Advantages
• Business registration is not required
• Business operation can start immediately
• The owner receives all profits
• Accounts do not have to be professionally audited
Disadvantages
• The owner is self-reliant
• The owner is personally liable for business debts
• The owner’s personal assets can be claimed against
business debts
• The business stops on the death of the owner
• The business name is not protected

8. Partnership
Advantages
• Business registration is not required
• Business operation can start immediately
• The partners share profits
• Accounts do not have to be professionally audited
Disadvantages
• The partners are personally liable for business debts
• The partners’ personal assets can be claimed against
business debts
• The business name is not protected

9. Private Limited
company (Pty Ltd)
Advantages
• Business registration is not required
• Business operation can start immediately
• The partners share profits
• Accounts do not have to be professionally audited
Disadvantages
• The partners are personally liable for business debts
• The partners’ personal assets can be claimed against
business debts
• The business name is not protected

10. Close corporation
(CC)
Advantages
• Registration is straightforward
• Accounts do not have to be professionally audited
Disadvantages
• Accounts must be formally audited
• Maximum of 10 members