Forms of Ownership
Options available:
➢ Sole trader: One person
➢ Partnership: Two to twenty people own the business according to an agreement.
➢ Close corporation: One to ten members. Informal.
➢ Private company: (PTY) Ltd: One to fifty shareholders and appointed directors.
➢ Public company: Ltd: Sell shares to the public and managed by directors.
➢ Co-operative: Combination to create improved business practise.
➢ Trust: Beneficiaries to receive allocations.
Factors that impact choice:
➢ Capital
▪ Amount needed
▪ Type: Own or borrowed.
➢ Formation procedure
▪ Registration process: Complex, expensive and time consuming.
▪ Documentation
➢ Liability
▪ Separation of protection.
▪ Owner’s liabilities.
➢ Continuity
▪ Restrictions
➢ Tax implications
▪ Progressive tax vs. Corporate tax
➢ Management
▪ Owners / Managers / Directors
Business Studies Forms of Ownership | 1
Options available:
➢ Sole trader: One person
➢ Partnership: Two to twenty people own the business according to an agreement.
➢ Close corporation: One to ten members. Informal.
➢ Private company: (PTY) Ltd: One to fifty shareholders and appointed directors.
➢ Public company: Ltd: Sell shares to the public and managed by directors.
➢ Co-operative: Combination to create improved business practise.
➢ Trust: Beneficiaries to receive allocations.
Factors that impact choice:
➢ Capital
▪ Amount needed
▪ Type: Own or borrowed.
➢ Formation procedure
▪ Registration process: Complex, expensive and time consuming.
▪ Documentation
➢ Liability
▪ Separation of protection.
▪ Owner’s liabilities.
➢ Continuity
▪ Restrictions
➢ Tax implications
▪ Progressive tax vs. Corporate tax
➢ Management
▪ Owners / Managers / Directors
Business Studies Forms of Ownership | 1
