FORMS OF BUSINESS ENTERPRISE

FORMS OF ENTERPRISE Sole proprietorship Partnership Close corporation Company Public Private SOC, NPC, INC

PARTNERSHIP 2-20 persons Contribute money, labour or skill to a common stock Carry on lawful business Aim to make a profit for benefit of the partners

ELEMENTS OF A PARTNERSHIP A valid contract Contribute to a common stock (pooling of resources) Carry on business to make a profit All partners to share – not necessarily equally

TYPES OF PARTNERSHIP Ordinary partnership – all partners jointly and severally liable Extraordinary partnership - different types Anonymous – (silent or sleeping partner)

RIGHTS & DUTIES OF PARTNERS Use partnership property properly Duty of good faith Access to books Share profits and losses Reimbursement

TERMINATION OF PARTNERSHIP End of agreed period Agreement Completion of purpose Death or retirement Insolvency Change in partners Sale of business By court

CLOSE CORPORATIONS No new CC’s Reasons for CC

COMPANIES 2008 Companies Act Advantages Limited liability Perpetual succession Separation of ownership & control Able to sue & be sued in own name Lifting & piercing of the corporate veil

COMPANIES Sec 21 allows pre-incorporation contracts Founding document is the MOI – sets out relationships Company & shareholders Company & directors Company & other internal parties Company & third parties

TYPES OF COMPANY Profit company Public, private & personal liability State owned Non profit company

BOARD Board of directors has a duty to manage the company Appoints board members Notice of meetings – 10 days/15 days Videoconferencing etc AGM Appointment of a proxy

RESOLUTIONS Ordinary – 50% of voting rights Special – 75% of voting rights See page 142 for when

DIRECTORS Ownership vs control Directors vs managers Managers implement strategy, policy & board decisions Directors set vision, strategy, direction of company Disqualifications Duties Types – executive & non - executive