FORMS OF BUSINESS ENTERPRISE FORMS OF ENTERPRISE Sole

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