Business Organisations

Business Organisations

by Mrs Lett

​Sole Proprietor

​Owned by one person

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​Legally the owner and business are not separate, unlimited liability

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​Capital is acquired through the owner

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​Profit making motive

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​Business closes upon death of owner/transferred through sale

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​Sole Proprietor

​Recieves all profits and losses

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​Pays personal income tax

Owner controls and manages everything​

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​Equity is made up of capital and profits

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​Subscribes to relevant local laws.

Multiple Choice

The sole trader is 

• the same legal enitity as the business

• not the same legal entity as the busines

• motivated by social welfare of others

• Gains capital through shares

​Partnership

​Owned by 2-20 persons called partners

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​The owner and business are legally the same entity, however it is possible to have partners with limited liability

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​Once at least one partner has unlimited liability

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​Governed by the Partnership Act

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​Motive is profit making

​Partnerships

​The business is transferred through admission or retirement of partners.

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​the business is not continuous but dies upon the retirement/death of a partner/admission of new partner

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​Managed by partners and capital invested by partner

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​Profits/losses shared among partners

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​The partners pay personal income tax

Fill in the Blank

Partnerships can have at least .......limited partner

​Limted Liability Companies

​Owned by investors called shareholders of which there can be an unlimited amount

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​The owners are legal separate from the business and therefore have unlimited liabiltiy

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​Shares are easily transferable for public companies and need Board approval for private companies

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​This makes the lifespan of the business continuous

​Limited Liability Companies

​Capital is acquired through the issuance of shares

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​The company is managed by the Board of Directors

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​Profits are shared through dividends

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​It is governed by the Companies Act and a corporation tax must be paid by the company while personal income tax is paid by the shareholder

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​This is called double taxation.

Poll

A major disadvantage of limited liability companies is 

• unlimited liability

• double taxation

• limited liability

• government interferance

​Cooperatives

​A group of persons called members who form an organisation to promote their socio-economic well being.

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​The owners are a separate legal entity from the business

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​The business is managed through a board of directors

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​Capital is raised through the issue of shares to members

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Shares are not transferable

​Cooperatives

​They are governed by the Cooperatives Act

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​Members receive funds through dividends and patronage funds.

Open Ended

What do you remember about Cooperatives?

​Non Governmental Organisations

​Usually run by a group of individuals or a company

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​They are a separate legal entity from the NGO

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​The lifespan is therefore continuous

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​Their motive is helping people

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​NGOs

​They are managed by a Board of Directors

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​Capital is acquired through government funding and public support/fundraisers

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​Income used to further the objective of the NGO

Multiple Choice

They are governed by 

• Managers

• Government

• Board of Directors

• A company