Types of Businesses and Ownership

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What is a Sole Proprietorship?

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A business owned and managed by one person.

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What are the advantages of a Sole Proprietorship?

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1. Easy to establish. 2. Owner keeps all profits. 3. Full control over decisions.

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What are the disadvantages of a Sole Proprietorship?

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1. Unlimited liability (personal assets at risk). 2. Limited capital and growth potential.

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What is a Partnership?

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A business owned by 2-20 people.

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What are the advantages of a Partnership?

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1. Shared responsibilities and skills. 2. Easier to raise capital.

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What are the disadvantages of a Partnership?

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1. Shared profits. 2. Risk of disagreements. 3. Unlimited liability for general partners.

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What is a Private Company (Pty Ltd)?

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A business owned by a small number of shareholders.

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What are the advantages of a Private Company?

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1. Limited liability (owners' personal assets are protected). 2. Easier to raise capital than sole proprietorships or partnerships.

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What are the disadvantages of a Private Company?

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1. Requires more compliance (e.g., financial reporting). 2. Shares cannot be freely traded on the stock market.

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What is a Public Company (Ltd)?

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A large business whose shares are sold to the public on the stock exchange.