KRG
200B
General
introduction to
business
,Definitions •Joint and several liability = “when
debtors are each liable separately A
jointly, with the effect that the credit
•Sole proprietorship = “a business run by a sole person in
of suing one or more of the debtors
that person’s own name, and not as a company, close
of the debtors jointly for payment o
corporation or business trust”
e.g. If the partnership has R6 000 00
•Partnership = “a relationship resulting from an agreement
creditor can sue 1 partner for the fu
or a contract . It is the carrying on of a business, to which
partners for their share of the amou
each of the partners contributes, in common for the joint
benefit of the parties with a view to making a profit” •Limited liability of shareholders a
“the concept that the shareholders o
•Juristic person = “a legal person that does not have a
members of a close corporation are
physical existence but possesses its own legal personality
debts of the company or the close c
which enables it to acquire rights and incur obligations that
are separate and distinct from those of the directors and •Perpetual succession = “legal con
shareholders of the company. Foreign companies and used to describe the status of a bus
trusts are defined in the Companies Act 71 of 2008 as legal such as a company or close corpora
persons.” existence is unaffected by changes
or members”
•Company = “a structure that is endorsed by law with the
capacity to acquire legal rights and be subject to legal
,FORMS OF BUSINESS STRUCT
1. Sole trader 2. Partners
RISK: RISK:
➡ No separate legal personality (i.e. Personally liable) ➡ Is not a separate legal person (Jointly &
CAPITAL & GROWTH: CAPITAL & GROWTH:
➡ Partners raise their own funds
➡ Raise own capital
MANAGEMENT & CONTROL: MANAGEMENT & CONTROL
➡ All partners automatically participate in
➡ Managed by owner with no agents
PERPETUAL SUCESSION: PERPETUAL SUCESSION:
➡ None
➡ None - once owner dies the business ceases to exist
TAX: TAX:
➡ Taxed in the personal capacity (i.e. tax
➡ Taxed in the personal capacity (i.e. tax tables)
➡ For VAT purposes the partnership is se
, 3. Close corporation 4. Company
RISK: RISK:
➡ Has a separate- legal personality (Limited liability) ➡ Is a separate legal entity (Limited l
CAPITAL & GROWTH: CAPITAL & GROWTH:
➡ Members contribute funds
➡ Shares can be issued to obtain fun
MANAGEMENT & CONTROL: investors)
➡ Debenture holders (external inves
➡ Every member is automatically an agent
➡ No directors
➡ Max 10 members
MANAGEMENT & CONTR
PURPOSE: ➡ Managed by board of directors (no
shareholders)
➡ For small businesses (wants to have the separate legal ➡ Agency is regulated
liability but does not want to give up management and ➡ Can have one shareholder
control)
➡ Mix between partnership & company PERPETUAL SUCESSION:
PERPETUAL SUCESSION: ➡ Does have perpetual succession
➡ Does have perpetual succession
TAX:
200B
General
introduction to
business
,Definitions •Joint and several liability = “when
debtors are each liable separately A
jointly, with the effect that the credit
•Sole proprietorship = “a business run by a sole person in
of suing one or more of the debtors
that person’s own name, and not as a company, close
of the debtors jointly for payment o
corporation or business trust”
e.g. If the partnership has R6 000 00
•Partnership = “a relationship resulting from an agreement
creditor can sue 1 partner for the fu
or a contract . It is the carrying on of a business, to which
partners for their share of the amou
each of the partners contributes, in common for the joint
benefit of the parties with a view to making a profit” •Limited liability of shareholders a
“the concept that the shareholders o
•Juristic person = “a legal person that does not have a
members of a close corporation are
physical existence but possesses its own legal personality
debts of the company or the close c
which enables it to acquire rights and incur obligations that
are separate and distinct from those of the directors and •Perpetual succession = “legal con
shareholders of the company. Foreign companies and used to describe the status of a bus
trusts are defined in the Companies Act 71 of 2008 as legal such as a company or close corpora
persons.” existence is unaffected by changes
or members”
•Company = “a structure that is endorsed by law with the
capacity to acquire legal rights and be subject to legal
,FORMS OF BUSINESS STRUCT
1. Sole trader 2. Partners
RISK: RISK:
➡ No separate legal personality (i.e. Personally liable) ➡ Is not a separate legal person (Jointly &
CAPITAL & GROWTH: CAPITAL & GROWTH:
➡ Partners raise their own funds
➡ Raise own capital
MANAGEMENT & CONTROL: MANAGEMENT & CONTROL
➡ All partners automatically participate in
➡ Managed by owner with no agents
PERPETUAL SUCESSION: PERPETUAL SUCESSION:
➡ None
➡ None - once owner dies the business ceases to exist
TAX: TAX:
➡ Taxed in the personal capacity (i.e. tax
➡ Taxed in the personal capacity (i.e. tax tables)
➡ For VAT purposes the partnership is se
, 3. Close corporation 4. Company
RISK: RISK:
➡ Has a separate- legal personality (Limited liability) ➡ Is a separate legal entity (Limited l
CAPITAL & GROWTH: CAPITAL & GROWTH:
➡ Members contribute funds
➡ Shares can be issued to obtain fun
MANAGEMENT & CONTROL: investors)
➡ Debenture holders (external inves
➡ Every member is automatically an agent
➡ No directors
➡ Max 10 members
MANAGEMENT & CONTR
PURPOSE: ➡ Managed by board of directors (no
shareholders)
➡ For small businesses (wants to have the separate legal ➡ Agency is regulated
liability but does not want to give up management and ➡ Can have one shareholder
control)
➡ Mix between partnership & company PERPETUAL SUCESSION:
PERPETUAL SUCESSION: ➡ Does have perpetual succession
➡ Does have perpetual succession
TAX:
