haajirahgal@gmail.com: Learners can reach me for any further questions or misunderstanding
Introduction
Good Afternoon Grade 8's
Today we will be discussing the different forms of ownership within the Business Sector
By the end of this lesson you will be able to:
- Differentiate between different forms of ownership.
- Describe each form of ownership in detail.
- Identify the form based on short scenario's.
Lets begin by mentioning all the forms of ownership in the business sector.
Task
Read the notes below, once you've read the notes below answer the questions in the activity.
Attached you will find a YouTube video on the explanation of each of the Forms of Ownership for a better understanding should it be necessary.
There are four forms of ownership that we'll be looking at for this topic:
- Sole Trader/Proprietor
- Partnership
- Closed Corporation
- Company
Lets begin with the Sole Trader
What is a Sole Trader?
This is a type of ownership when only one person owns the business and this is usually their only form of income. This person or owner has complete control over the business in terms of making decisions with regards to the business. A sole proprietor pays income tax and not company tax as all profits are solely for the owner. This form of ownership does not have to be registered. E.g. School Tuckshop.
We now look at a Partnership
What is a Partnership?
This form of ownership consists of two or more people who run the business, each and every partner needs to agree and contribute to the business in order for the business to run. Each partner is entitled to a percentage of the profits of the business but they are also responsible for all debts brought about by the business.
The following form of ownership is a Closed Corporation.
What is a Closed Corporation?
A closed corporation is a business that consists of two to ten members who fall apart of this company. The name of a closed corp. will always end with CC to identify as a closed corporation. With this form of ownership there is limited liability which means that the members are not responsible for the debts of the business. It is easier to open a closed corporation than a company. Closed Corporations are seen as seperate legal entities which basically means it is seen as an individual and can own assets etc.
The final form of ownership we will be discussing is the Company
What is a Company?
A company is form of ownership that consists of two types 1. Public Company and 2. Private Company. A company is run by a board of directors and not a sole owner. There can be one to 50 members or owners of a company. A company like a Closed corporation has limited liability so for this reason the directors are not held responsible for the debts of the company.
Public companies are listed on the JSE this allows the general public to purchase shares within the company and they will then benefit from the profits
Private Companies are the opposite these companies are not listed on the JSE and shares belong to one or a group of members and is not available to purchase by the public. Private company names will always end with Pty LTD.
Youtube Video
Process
After reading the Notes above and watching the video if necessary Complete the activity below.
Activity One
- Name the four forms of ownership
- How many members can a Closed Corporation consist of?
- There are two types of companies name the two.
- Provide two characteristics of a Sole Trader/Proprietor
- Complete the table below by matching column A with column B. Write only the correct letter from column B next to the number from Column A, e.g. 5.1) F
Column A Column B 1. Closed Corporation a.) Run by a board of directors 2. Company b.) Does not have to be registered 3. Sole Proprietor c.) Consists of 2 to 20 members 4. Partnership d.) Ends with CC.
Total: 15 Marks.
Evaluation
Check Answers Below
Activity One
- Sole proprietor, Closed Corporation, Partnership and Company (4)
- Two to Ten members (2)
- Private Company & Public Company (2)
- One owner, no registration needed, can be closed easily, all Profits go to the owner. (Any Two) (2)
- 1. D
2. A
3. B
4. C (5)
Total: 15 Marks
Conclusion
We've reached the end of our lesson I hope you enjoyed the content provided and understand the topic as best possible.
At the end of this lesson you should be able to:
- Describe each form of ownership
- Mention all Forms of ownership
- Differentiate between all forms of ownerships
Do some self study on one of the forms of ownership find an example of a selected form of ownership and research this specific business, identify the characteristics that make this business that specific form of ownership.