Ownership

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FORMS OF OWNERSHIP

(Pages 134–145)

1.

Sole Trader

  • Owned by: One person.

  • Examples: A tuck shop, a small hair salon.

  • Advantages: Easy to start, keeps all the profits, makes quick decisions.

  • Disadvantages: Owner takes all the risk, limited money to grow, works long hours.

2.

Partnership

  • Owned by: 2 or more people (up to 20).

  • Examples: Doctors working together in a clinic.

  • Advantages: More money, shared responsibilities, different skills.

  • Disadvantages: Share profits, disagreements can happen, all partners share the risks.

3.

Private Company (Pty Ltd)

  • Owned by: A few people (family or friends).

  • Shares: Not sold to the public.

  • Advantages: Owners’ personal things are safe (limited liability), more money than a sole trader.

  • Disadvantages: Expensive to start, follows many rules.

4.

Public Company (Ltd)

  • Owned by: The public (anyone can buy shares).

  • Examples: Shoprite, MTN.

  • Advantages: Can get lots of money by selling shares, easy to grow big.

  • Disadvantages: Very complicated, lots of legal rules.

5.

Close Corporation (CC)

  • Owned by: 1–10 people.

  • Note: New ones cannot be formed anymore, but old ones still exist.

  • Advantages: Less paperwork than a company, owners are protected (limited liability).

  • Disadvantages: No longer allowed to start new ones.