- Information
- AI Chat
Notes according to the textbook
notes
Course
Business law (BUSL6222)
29 Documents
Students shared 29 documents in this course
University
Varsity College
Academic year: 2023/2024
Uploaded by:
Anonymous Student
This document has been uploaded by a student, just like you, who decided to remain anonymous.
Varsity CollegeRecommended for you
Preview text
Learning unit 1
-chapter 2
Companies and other business entities : Why incorporate a business?
A person does not have to form a company in order to trade or open a business.
There are a number of matters that require careful consideration before deciding on the business entity specifically :
- Capital required to commence the business
- Source of capital
- The requirements of customers and clients
- Strategic objectives of those involved
THE FOLLOWING COMPANIES CAN BE FORMED:
- Company
- Closed Corporation
- Business Trust
- Partnership
- Or any combination of the above stated companies
Any combination of the above-mentioned companies that carries on using the businesses using assets in its trading activities that the company itself does not own but are held in a trust that leases the assets to the company.
The shareholders of the company could be the same people who are the beneficiaries of the trust.
The simplest way to carry on a business is for a person to carry on the business in their own name
(sole partnership)
- Easy to set up and manage
- Few formalities other than obtaining a trading license
- Could be personally sued and their assets exposed to risk from creditors
Partnerships
- A relatively simple structure
- Not a separate legal person
- Assets of either party may be subjected to a claim by a creditor as all partners are jointly and severally liable for all debts of the entire partnership.
- Does not have perpetual succession and automatically dissolves on the following circumstances:
- Death
- Insolvency
- Retirement
- Admission of a partner
Trusts
- Can be used to carry on business activities
- They are more regulated than is usually understood
Closed Corporations
- Benefits of perpetual succession ,this means that if one of the members have died it does not affect the company in any way
- The death of a member does not affect the contracts such as lease agreements or the license entered into / obtained by the corporation.
-
-
Was this document helpful?
Notes according to the textbook
Course: Business law (BUSL6222)
29 Documents
Students shared 29 documents in this course
University: Varsity College
Was this document helpful?
Learning unit 1
-chapter 2
Companies and other business entities : Why incorporate a business ?
A person does not have to form a company in order to trade or open a business.
There are a number of matters that require careful consideration before deciding on the business entity
specifically :
- Capital required to commence the business
- Source of capital
- The requirements of customers and clients
- Strategic objectives of those involved
THE FOLLOWING COMPANIES CAN BE FORMED:
- Company
- Closed Corporation
- Business Trust
- Partnership
- Or any combination of the above stated companies
Any combination of the above-mentioned companies that carries on using the businesses using assets in
its trading activities that the company itself does not own but are held in a trust that leases the assets to
the company.
The shareholders of the company could be the same people who are the beneficiaries of the trust.
The simplest way to carry on a business is for a person to carry on the business in their own name
(sole partnership)
- Easy to set up and manage
- Few formalities other than obtaining a trading license
- Could be personally sued and their assets exposed to risk from creditors
Partnerships
- A relatively simple structure
- Not a separate legal person
- Assets of either party may be subjected to a claim by a creditor as all partners are jointly and
severally liable for all debts of the entire partnership.
- Does not have perpetual succession and automatically dissolves on the following circumstances:
- Death
- Insolvency
- Retirement
- Admission of a partner
