5 primary – 1 no limit 3 no limit Number – – 2 no limit – Owners Shareholders Member/Shareholder Not required Liability No one is liable Limited Director(s) Management 1 or more directors Board of Directors 3 or more directors Formation documents MOI MOI MOI May qualify for tax Tax Company tax Double tax Tax on income retained – exemption Members portion of surplus proportion to No part of income may – Profits Dividends approval – the value of transactions be paid to director conducted by a member 4.2 Critically evaluate the forms of ownership in terms of the following criteria: [Refer Exam Guide] Capacity • Taxation • Management • Capital • Division of Profits • Legislation • Sole Trader Success Factors Failure factors 1 Capacity The business is easy to control Difficult for one person to because it is control all the business Personal attention of owner is functions. given. There is also no difference between your debt and the debt of the business. Difficult to continue and grow long term Taxation The is taxed as an individual If the scales are increased, the tax payer on his/her share of the owner will have less profit. profit. If profits are very high it might be Business does not pay secondary not be a good idea to form a sole or companies tax proprietorship as the increased tax might be higher than a CC or company.
Number 1 – no limit 5 – primary 2 – no limit 3 – no limit Owners Shareholders Member/Shareholder Not required Liability No one is liable Limited Director(s) Management 1 or more directors Board of Directors 3 or more directors Formation documents MOI MOI MOI Tax Company tax – Double tax Tax on income retained May qualify for tax exemption Profits Dividends – approval Members portion of surplus – proportion to the value of transactions conducted by a member No part of income may be paid to director 4.2 Critically evaluate the forms of ownership in terms of the following criteria: [Refer Exam Guide] • Capacity • Taxation • Management • Capital • Division of Profits • Legislation Sole Trader Success Factors Failure factors 1 Capacity The business is easy to control because it is Personal attention of owner is given. Difficult for one person to control all the business functions. There is also no difference between your debt and the debt of the business. Difficult to continue and grow long term Taxation The is taxed as an individual tax payer on his/her share of the profit. Business does not pay secondary or companies tax If the scales are increased, the owner will have less profit. If profits are very high it might be not be a good idea to form a sole proprietorship as the increased tax might be higher than a CC or company.
2015%20NGGr%2012%20Bus%20Stud%20Core%20Content_Bus%20Ventures%201.docx