LECTURE 1 UNIT 1 1.1 FORMS OF BUSINESS ORGANISATIONS Business & entrepreneurship education BEE- GRADE 9 Objectives You will… Identify the features of a Sole Trader’ Partnership and a company Analyse the setting up of a Company Explain the Advantages and disadvantages of each type of organization Types of Business Organisation Sole Trader I will... Characteristics of a Sole Trader Unlimited Liability Advantages of Sole Trader Business Partnership Definition of a Company • A company is an incorporated business organization which is owned by its Shareholders • Companies are easily identified as the name must be followed by ‘Company Limited” • Private Limited Company –It is a business that raises capital from a small number of shareholders such as friends and/ or relatives • Public Limited Company- It is a business that raises capital by issuing shares to members of the general public. It is usually larger than a private limited company. Features of a Company Registration A company must be incorporated at the Registrar of Ownership Control Risk Profits Companies .it then gets a separate legal identity from the owners identity. A shareholders are the owners of a company .They buy shares of a company .Each share has one voting right . A company is managed by a Board of Directors. They are appointed to make decisions and control the business .The accounts are presented to the shareholders in an AGM. Shareholders have Limited liability. The company’s profit is distributed to shareholders as dividend Terms Explanation of Terms Companies Act Legal document which outlines laws and regulations to set up a company It is a voucher that represents a Unit of capital Share Shareholder Share Certificate Dividend Board of Directors Limited Liability A shareholder invest in the company by buying shares. They are owners of the company It is an official document stating the number of shares that the shareholders have in the company It is part of the company’s profits that is distributed to shareholders They are those who have been elected by shareholders to manage the company It means that in case of bankruptcy the shareholders will lose only the initial amount invested in the company Terms Explanation of Terms Registrar of Companies It is the authority that registers companies and issue the certificate of incorporation to allow the business to start its operations Memorandum of Association It is a legal document which provides details such as company’s name, physical address of registered office, names of shareholders; the objectives of the company and the distribution of shares Articles of Association It is a document that specifies the internal rules of a company. Certificate of Operation It is a legal document showing the official date a company can start operating Annual General It is a yearly meeting where shareholders elect the directors of a Meeting company and the annual report about the performance of business is presented and approved. Company Names To Set Up a Company Application Forms (available at Registrar of Companies) Registration -Memorandum of Association -Articles of Association Certificate of Incorporation Private Limited Company I will... Advantages and Disadvantages Incorporation of a Company
