Ownership Flashcards
(14 cards)
what does it mean if a person is a Legal Entity
It means that the person has contractual capacity
Can a Bussiness be a Legal Entity
Yes, Depending on the type of ownership
Does a Sole Trader and a Partnership have continuity
No, It means if the owner leaves the business The business Does not exist anymore
What are some facts to consider in continuity
Liabilities and debts of a business, TAX, Amount of Capital required
What is a sole trader
This is a business owned by one person
What are some advantages of being a sole trader
Full control Does not share profits, Few legal requirments, easy to make decisions, less capital is needed to start
what are some Disadvantages of being a sole trader
there is no continuity, Could be difficult to obtain a loan, The owner is personally held liable for all the debts
what is a partnership
2-20 people who have brought up a Partnerhship agreement
what are advantages of a partnership
More Owners can encourage harder work
can raise more capital
Decision making is easier
Easy to start up
what are disadvantages of a Partnership
All partners are liable for the debts of a business
Instant desicions cannot be made
If one partner leaves a new partnership is made
what are some public company characteristics
listed on JSE
Minimum of 7 share holders
no maximum number of share holders
Name must end in Ltd
Shares are bought and sold on JSE
Financial Statements must be audited
what are some Private company characteristics
Not listed no JSE
Minimum number of 1 share holders
Maximum number of 50 shareholders
Name must end in Pty
Shares are not freely available
Financial Statements need not to be Audited
what are advantages of a company
It is a separate legal entity
Unlimited continuity
Shareholders have limited liability for the debts of a business
What are disadvantages of a company
Start up costs are high
Administration costs and running costs are high
