Let me simplify forms of ownership for you, making it quick and easy to remember. If you can grasp these key facts, then you are on your way to excelling in this topic.
This content is relevant to all Business Studies learners and educators, Grade 10 – 12, and is aligned with the CAPS curriculum.
These Two Forms of Ownership Are NOT Companies
In South Africa, the following types of businesses or forms of ownership are not considered companies because they are not formally registered as such:
Not Companies
- Sole Trader
- Partnership
Shared Characteristics
- Not registered as companies
- No separate legal entity
- No continuity
- Unlimited liability
- Flexible naming
These Are Companies
Only these are considered companies, as stated in their names. Remember, in South Africa, if it doesn’t say “company” in the name, then it is not a company:
Companies
- Private Company: (Pty) Ltd – [Proprietary Limited]
- Public Company: Ltd – [Limited]
- Personal Liability Company: (Inc) – [Incorporated]
- State-Owned Company: SOC Ltd
- Non-Profit Company: NPC
Shared Characteristics
- Registered with the Companies and Intellectual Property Commission (CIPC)
- Memorandum of Incorporation (MOI)
- Separate legal entity
- Continuity
- Limited liability (except Personal Liability Company)
- Restrictions on names
Public vs State-Owned Company
Public Company
- Owned by shareholders (members of the public)
- Can list on the Johannesburg Securities Exchange (JSE)
- Name ends with “Ltd”
State-Owned Company
- Government-owned
- Name may include “SOC”
Private vs Personal Liability Company
Private and personal liability companies have many characteristics in common. The two key differences are:
Private Company
- Limited liability
- Name ends with “(Pty) Ltd”
Personal Liability Company
- Directors have unlimited liability
- Name ends with “(Inc)”
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