forms of ownership essay grade 11

Forms of Ownership- Forming a Company vs Other Forms of Ownership

FORMS OF OWNERSHIP

2. THE BENEFITS AND CHALLENGES OF ESTABLISHING A COMPANY VERSUS OTHER FORMS OF OWNERSHIP  

  2.1 Benefits:

• More owners means the possibility of more capital  
• More capital means greater possibility for expansion and growth
• Shareholders appoint a board of directors that gives more effective management
• A separate legal entity AND continuity of existence
• Profit on company tax is paid at a fixed rate.

  2.2 Challenges:

• Expensive and complicated formation procedures
• Many legal requirements to comply with
• If the directors are not competent then the shareholders' investments may be at risk

3. THE FORMATION OF COMPANIES  

  3.1 Registration:

• The Memorandum of Association must be drawn up.   It must be filed together with the Notice of Incorporation with the Companies and Intellectual Property Commission.

The Six Steps in forming a company:

1)       The company name is reserved and the fees are paid to the Registrar of Companies and Intellectual Property Commission.

2)       The certificate to commence business is submitted with the formation documents

3)       The company opens a bank account

4)       The company registers for income tax, VAT and employee withholding tax with the local Receiver of Revenue.  

5)       The company registers for UIF with the Department of Labour

6)       The company registers with the commissioner for the Compensation for occupational Injuries and Diseases Act ( COIDA)

3.2 The company’s charter – the Memorandum and Articles of Association:

  The memorandum of association defines the scope of a company and includes the following:

• Company's name
• Address of the registered office
• Stating of the limited liability of the shareholders
• The amount of share capital
• The purpose of the company

  The articles of association indicate the internal management regulations and include the following:

• Names of the directors and their roles
• The way in which profits will be distributed
• The internal rules for the running of the company
• Voting rights of shareholders

3.3 The Prospectus  

A prospectus is a written invitation, issued to the public offering shares/securities in exchange for money.     

    A prospectus must convince the public that they should buy shares in the company. It states:

• The purpose of the offer
• The share capital
• The shares issued
• Property owned
• Preliminary expenses
• Amounts due to the promoters
• Particulars of shares
• The minimum subscription
• Name of the company – incorporation and commencement of the company  

  Members of the public have 60 days to reply to the invitation.

The minimum subscription: before a public company may commence the company must prove that enough shares have been issued to cover the costs of launching the company and any other initial expenses that may be incurred. This is called the minimum subscription and they must be sold within 60 days of issuing the prospectus otherwise the public company may not commence business.

3.4 Underwriting

To ensure that the minimum subscription is met, a bank or other financial institution may guarantee to buy any shares not yet sold in order to make up the minimum capital requirements.

This ensures that –

• The minimum subscription will be sold
• The business can commence as a public company

Lesson Files

Lesson questions.

All questions are to be answered on the portal. 

1. Mention the main challenge to forming a compay versus the other forms of ownership studies. (2)

2. What is a prospectus? (2)

3. Mention 3 things included in the memorandum of association. (3)

4. Mention 2 benefits of forming a company (2)

5. Do companies pay tax? (1)

Business Studies Grade 11: Forms of Ownership

Good Day students.

Today we will be discussing business Forms of Ownership.

Forms of Ownership is the way the business is structured legally

This topic was covered in grade 10 but in grade 11 we will elaborate more on the content. 

In grade this chapter we will cover Sole Traders, Partnership, Closed Corporation,(CC) Non profit company, (NPO) Private company, (PTY) Public company, State owned Entity (SOE) and co operatives

We start off with an introductory video: 

Please watch this video to refresh and introduce you to the topic at hand

We will then discuss the forms of ownership using the following link below

https://www.livecareer.com/resources/careers/planning/business-ownership

What is a Sole trader? 

a sole trader is an individual person owning the business. This person handles all the tasks in the business and is responsible for all actions happening in the business 

What is a partnership?

A partnership is an agreement between two or more business partners who share the responsibilities, decisions and profits of the business

What is a closed corporation

A cc is a separate legal entity which makes financial and strategic decisions on its own

What is a non profit company?

This is an organization whose primary aim is not to make any money. Instead, they serve the public or are there for a specific cause. 

What is a private company?

A company in which the public cannot buy any shares and has its own directors

What is a Public Company?

This is a company registered to the stock exchange (JSE) and sells its shares to the public

What is a State Owned Company?

This is a business with majority of the shares owned by the government themselves. The business takes on a commercial enterprise on behalf of the government 

What is a Co-operative?

This is a group getting together to share resources and costs to achieve a better outcome.

Please download the 2019 Business Studies exemplar paper and complete the entire question paper by next week as practice. You have the entire week to complete this practice paper. Pace yourself and do not complete all the Questions on one go. Do a maximum of one/two questions per day (Question 1 on Monday and Question 2 on Tuesday etc.)  ( https://www.education.gov.za/Curriculum/NationalCurriculumStatementsGradesR-12/2019Grade11Exemplars.aspx ) 

During the lesson, students will be asked to list the advantages and disadvantages of a sole trader, partnership, closed corporation, non profit company, private company, public company and a co-operative. They may use the textbook in class as a guide. 

                                                   Pros                                                                        Cons

Sole Trader

Partnership

Non profit company

Private Company

Public Company

Co-operative

The answers of the classwork will be gone through in the next lesson with the teacher citing the website below and the textbook as a guide to better explain to the students

https://www.g2.com/articles/types-of-business-ownership

In this lesson, we have discussed the introduction of the forms of ownership done in grade 10 and further discussed the content covered in grade 11. The class did an activity listing the advantages and disadvantages of the forms of ownership.

For homework, students were given the link to download an exemplar paper in which they need to complete one/two questions a day.

The next time we meet, we will discuss establishing a company, the challenges of starting a company and the structures within companies. This will be split into a few lessons.

https://www.education.gov.za/Curriculum/NationalCurriculumStatementsGradesR-12/2019Grade11Exemplars.aspx

https://www.livecareer.com/resources/careers/planning/business-ownership  

Students can find information on YouTube and there are many websites available with information regarding forms of ownership.

Students can use the government website provided to find the grade 11 exemplar paper. In grade 12, they can refer back to this lesson as practice  

This lesson is a rather fast paced lesson but can be slowed down with the use of information websites and YouTube videos found online

Grade 11 Business Studies Past Papers and Memos (South Africa)

This page contains Grade 11 Business Studies past exam papers and memos (South Africa). You can browse and download question papers and memos for your revisions (2019, 2018 May/June, October, November).

Table of Contents

Critical Topics for Term 1 Revision

• Influences on and control factors influencing business environments.
• Challenges in business environments
• Adapting to challenges in business environments
• Impact and challenges of contemporary socioeconomic issues on business operations
• Business sectors
• Benefits of a company versus other forms of ownership
• Avenues of acquiring a business

Critical Topics for Term 2 Revision

• Creative thinking and problem solving Stress, crisis and change management
• Transform a business plan into an action plan Starting a business venture based on an action plan Professionalism and ethics
• Presentation of Business Information

Critical Topics for Term 3 Revision

• Assessment of entrepreneurial qualities in business Citizenship roles and responsibilities
• Marketing activities, marketing in the formal and informal sectors Use of technology for marketing
• Imports and exports
• Foreign marketing
• The alignment of foreign marketing and the production function Production function
• Team Stages, dynamics theories and conflict management
• Introduction to the Human Resources function

Download Grade 11 Business Studies Past Papers and Memos

Business studies grade 11 2017 exams (english and afrikaans) question papers:.

• BUS STUDIES GR11 QP NOV2017_Afrikaans
• BUS STUDIES GR11 QP NOV2017_English
• BUS STUDIES GR11 MEMO NOV2017_Afrikaans
• BUS STUDIES GR11 MEMO NOV2017_English

Business Studies grade 11 2016  Exams (English and Afrikaans) question papers:

• Gr11-BSTD-N16-QP-Afr
• Gr11-BSTD-N16-QP-Eng
• Gr11-BSTD-N16-MEMO-Afr
• Gr11-BSTD-N16-MEMO-Eng

More Grade 11 Study Resources

• Grade 11 Computer Applications Technology Study Guides Available for Free Download
• Life Orientation Grade 11 Past Exam Papers and Study Guides
• Grade 11 Physical Sciences Study Guide Free Download
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• Saturday school for grade 11 by Sci-Bono
• Grade 11 English Home Language Study Guide Free Download
• Grade 11 Business Studies Study Guides Available for Free Download. 

Download all Grade 11 Previous Question Papers

Hello Grade 11 Learners. Modern Classroom has everything for you needed to pass your exams, tests, assessments, research tasks and assignments under CAPS Curriculum . Feel free to explore all resources for grade 11, such as Study Guides, DBE Past Exam Papers with Memos , and Speech Topics. That’s if you want to know how to pass grade 11 with distinctions in South Africa

Why passing Grade 11 is very important

Grade 11 ultimately prepares you for Grade 12. You regard Grade 11 as your last trial run for your Matric year because most of the work covered in the syllabus will prepare you for Matric anyway. Passing your Grade 11 very well, is usually a sign that you may pass very well in Matric.

What can you do with your Grade 11 marks in South Africa?

• You can apply at a South African University using your Grade 11 marks
• You can already apply for university bursaries using your Grade 11 marks

Other Grade 11 Subjects

• Accounting Grade 11
• Economics Grade 11  
• Mathematics Grade 11  
• Technical Mathematics Grade 11
• Physical Science Grade 11
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• Biology Grade 11  
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• Tourism and Hospitality Studies Grade 11  
• Computer Applications Technology Grade 11  
• Civil Technology Grade 11  
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• Engineering Graphics and Designs Grade 11  
• Information Technology Grade 11  
• Mechanical Technology Grade 11  
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Did You See These?

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• Grade 11 Life Orientation Study Guide Free Download (South Africa)
• Agricultural Sciences Grade 11 Past Papers and Memos for 2019
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• Business Studies Grade 11 past exam papers and memos 2020
• Accounting Grade 11 Exam Papers and Memos for Revision (South Africa)
• Grade 11 Life Sciences (Biology) Study Guides Free Download (South Africa)

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Forms Of Ownership (Essay Sample)

Forms of ownership.

A majority of people aspire to own their businesses or partner with their friends and families to open a business. Like in all other instances, having the right information is always an advantage especially if one is planning to venture into something which is new to them. In business, therefore, it is essential to first of all understand the options one has especially when it comes to the legal structure of ownership. Having an understanding of the forms of ownership one is allowed under the law is necessary and will help in the final decision one makes. Many people often ignore some of the simple instructions or pieces of advice they find. The results for such often include regret and run-ins with the law. Therefore, to avoid extra costs while setting up a startup, one needs to have a deep understanding of the following options of ownership:

• Sole Proprietorship

When people think of starting their own businesses, a majority think of venturing out on their own. At first, people prefer to walk alone and invest all their savings in an idea. When people start businesses by themselves it is called a sole proprietorship. In such a situation, a person is considered one with the business. This means that a person owns all the business’s assets as well as all the generated profits. Moreover, one is also considered responsible for all the debts and liabilities associated with the business.

People prefer sole proprietorship because they are the least expensive to start as well as organize. Additionally, one does not have to share the profits and oversees all the operations of the business. However, it is important to note that they lack limited liability which means that any losses directly affect the owner. The above means that one’s personal property could be at risk if the business defaults in payment of certain debts.

• Partnerships

Unlike sole proprietorships, partnerships involve instances where several people share ownership of a business. However, like sole proprietorships the business is considered one with the owners. In a partnership, there is always a written legal document that outlines how the profits and losses will be distributed, decisions will be made in the business, impasses will be resolved, and also how the business will admit other partners in the future. Partnerships tend to be a lot stronger than sole proprietorships because the losses are shared which would mean that the weight is distributed and no single person bears a heavier burden than the other.

• Corporations

Corporations are set up differently and unlike partnerships and sole proprietorships, they are viewed as separate entities from their owners. As witnessed in a number of occasions, corporations can be sued, enter into different contractual agreements, and they can also be taxed. Owners of a corporation are known as shareholders and the often select directors and managers who oversee the corporation on their behalf. The ownership of a corporation changes from time to time without affecting the state or workings of a corporation.

• Limited Liability Company

Though previously non-existent, a Limited Liability Company combines the tax efficiencies and operative flexibility of partnerships and the limited liability attributes of corporations. However, while forming an LLC, the process is quite formal and mainly encompasses a lot more details including the duration of the LLC.

In conclusion, understanding these different forms of ownership is essential and would help one in deciding which business venture to pursue.