Business Forms in South Africa:
Natural person individual person that has rights and duties.
Juristic person legal person, not have physical existence but possesses
own legal personality, enables it to acquire rights & incur obligations that
separate + distinct from directors and shareholders of co.
*Foreign co. and trusts = legal persons, Co. Act 71 of 2008.
Sole Proprietorship busi. run by sole person in own name, not as co., CC
or busi. trust.
Partnership relationship resulting from agreement/contract … carrying on
of busi., to which each partners contributes, in common for joint benefit of
party’s w/ view to making profit.
Company structure endorsed by law w/ capacity to acquire legal rights +
subject to legal duties.
Closed Corporation CC Act of 1984
Joint & several liability when 2/+ debtors each liable severally
(separately) AND liable jointly, w/ effect that creditor has option of suing 1/+
of debtors severally OR all debtors jointly for payment of debt.
Limited liability of shareholder & members concept that shareholders
of co./members CC not liable for debts of co./CC.
Perpetual Succession legal continuity, describes status of business
structure such as co./CC whose legal existence unaffected by changes in
shareholders/members.
Entrepreneur looks @ before choosing busi. structure:
Risk capital + growth management + control perpetual succession tax legal
+ admin formalities + costs.
Separate legal personality – 1. Juristic person = separate from members +
directors + shareholders + creditors.
2. Limited liability (shareholder personal A protected = investment lost).
3. A = exclusive property of co. (need proper authorisation).
4. Debts = owed by co.
5. Rights = privacy + good name (reputation).
6. Sue/be sued in OWN name.
Exception: pierce corporate veil to hold members/directors personally liable.
7. Perpetual succession = busi. continuity (change ownership not change
existence).
8. NO arms or legs act perf. by agents.
Natural person individual person that has rights and duties.
Juristic person legal person, not have physical existence but possesses
own legal personality, enables it to acquire rights & incur obligations that
separate + distinct from directors and shareholders of co.
*Foreign co. and trusts = legal persons, Co. Act 71 of 2008.
Sole Proprietorship busi. run by sole person in own name, not as co., CC
or busi. trust.
Partnership relationship resulting from agreement/contract … carrying on
of busi., to which each partners contributes, in common for joint benefit of
party’s w/ view to making profit.
Company structure endorsed by law w/ capacity to acquire legal rights +
subject to legal duties.
Closed Corporation CC Act of 1984
Joint & several liability when 2/+ debtors each liable severally
(separately) AND liable jointly, w/ effect that creditor has option of suing 1/+
of debtors severally OR all debtors jointly for payment of debt.
Limited liability of shareholder & members concept that shareholders
of co./members CC not liable for debts of co./CC.
Perpetual Succession legal continuity, describes status of business
structure such as co./CC whose legal existence unaffected by changes in
shareholders/members.
Entrepreneur looks @ before choosing busi. structure:
Risk capital + growth management + control perpetual succession tax legal
+ admin formalities + costs.
Separate legal personality – 1. Juristic person = separate from members +
directors + shareholders + creditors.
2. Limited liability (shareholder personal A protected = investment lost).
3. A = exclusive property of co. (need proper authorisation).
4. Debts = owed by co.
5. Rights = privacy + good name (reputation).
6. Sue/be sued in OWN name.
Exception: pierce corporate veil to hold members/directors personally liable.
7. Perpetual succession = busi. continuity (change ownership not change
existence).
8. NO arms or legs act perf. by agents.
