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Economic and management sciences

Grade 9


Module 14

Ownership of a business


To discuss the different kinds of ownership of a business

[lo 4.3]

When you plan to start a business you must decide to whom the business will belong.

There are mainly four options: you as individual could be the owner, you could establish a close corporation, you could create a company or you could take up a concession.

Option 1: you assume ownership as individual

You can own the business in your personal capacity. That means that you as person

  • will be taxed on any profits of the business (maximum 40%), and
  • will be held accountable for debts that are incurred by the business (which means that, should the business not be in a position to pay the debts, you could lose your possessions and means of livelihood).

You could also invite other people to become co-owners, but that is dangerous, because there is always the possibility of misunderstandings and tension in the management of the business.

Option 2: you establish a close corporation

In this case you become a member of the corporation and your personal assets are protected. Your accountability for any debts of the corporation does not exceed the amount of capital that you contributed. Furthermore the income tax is fixed at 30%, which is substantially less than in the case of an individual. You can also allow other people to become members, which means that you obtain additional financial support and do not stand altogether alone. As a close corporation functions in terms of a specific law, the interests of all the members are protected. The books of a CC must be done by a chartered accountant. There can be 1 – 10 members.

The name of a close corporation always ends in CC, for example Laser Services CC.

Option 3: you create a private company

A company is managed in terms of a specific act and a number of requirements must be met that are not applicable to a close corporation. There must be a board of directors and the names of the board members must be made available to the Public Registrar of Companies . Fully audited annual statements must be submitted annually. Annual general meetings must be

held according to prescribed guidelines. All these requirements make the process of establishing a private company quite expensive.

The name of a private company ends in (Pty) Ltd.

Option 4: you take up a franchise

A franchise has many advantages for an individual, becomes a business owner, but has the support of the group and shares in advantages such as purchasing stock at lower prices, having access to tried and tested recipes (e.g. in the case of a restaurant), etc. Well-known names such as SPAR and 7-Eleven are examples of franchises.


Learning Outcomes (LOs)
LO 4
Business, Consumer and Financial Knowledge and Skills The learner is able to apply, in a responsible manner, a range of business, consumer and financial skills.
Assessment Standards(ASs)
We know this if the learner:
4.1 generates, through SWOT analysis, possible business ideas to meet the need for manufactured goods or services;
4.2 develops a business plan (including a budget) for a manufacturing, service or tourism concern based on the best business opportunity from the ideas generated;
4.3 engages in the business activity planned and discusses the reasons for choosing a particular form of ownership;
4.4 conducts a marketing campaign to promote a product and discusses the self-selected advertising media;
4.5 researches the role of small, medium and micro enterprises in wealth and job processes.

In Conclusion:

How would you feel if your name were to appear like this in the newspapers some day?



Gert Coetzee

Once again an inhabitant of Bloemfontein has made a great hit in the field of information technology. This time it is Mr Brian Lackey (54), a jovial businessman who sold a computer program for tens of millions of rands to a foreign company.

Lackey’s success follows hot on the heels of that of Mr Igmé Hatting (27), a computer programmer who also hails from Bloemfontein. He sold his program for access control and equipment operation in stadiums to a foreign company for “somewhere between R106 million and R700 million”.

Lackey has confirmed that his 4D group has sold the right of use for a combined program for the micro-loaning industry and credit life insurance to the Australian division of an international company which has its headquarters in the United States of America.

This company may use the program in every country in the world except in South Africa. Lackey has retained the South African rights because he has many local clients and the business prospects in this country are “unlimited”.

Owing to the sensitivity of the transaction he cannot reveal the name of the foreign buyer or the purchase price.

According to a reliable source the purchase price is “round about R400 million”. According to Lackey the transaction has been finalised pending a condition that the program be made “web friendly”.

A team of workers has already been working on this for 12 to 15 hours per day for the past months. Payment will be done in US dollars once the program has been adapted.

Lackey, who was born in Walvis Bay, was the provincial manager of a catering business in the Free State until the ‘80s, when he started his own business.

In 1993 he started a micro-lending business. He asked a friend to write a program for the administration of loans so that he could manage the data of his 900 clients.

This program was hired out to other micro-lenders, some of them even in Cape Town. “Before we knew where we were, we were being inundated with calls. It was an easy decision to bid farewell to the micro-lending business in favour of the new venture of developing software.”

The 4D group , with companies such as Proloan Marketing and 4D Insurance Solutions in its stable, and with 30 employees in offices in Bloemfontein, Centurion and Cape Town, was established then.

Lackey does not write the programs himself, but conceives them. His employees do the rest.

Initially Lackey kept the good news to himself and did not tell his employees. Once it leaked out, he informed them about the new developments “so that they would not read about everything in the newspapers”. Every employee will receive a bonus.

(Source: Die Burger , 31 July 2003)

Questions & Answers

Do somebody tell me a best nano engineering book for beginners?
s. Reply
what is fullerene does it is used to make bukky balls
Devang Reply
are you nano engineer ?
what is the Synthesis, properties,and applications of carbon nano chemistry
Abhijith Reply
so some one know about replacing silicon atom with phosphorous in semiconductors device?
s. Reply
Yeah, it is a pain to say the least. You basically have to heat the substarte up to around 1000 degrees celcius then pass phosphene gas over top of it, which is explosive and toxic by the way, under very low pressure.
how to fabricate graphene ink ?
for screen printed electrodes ?
What is lattice structure?
s. Reply
of graphene you mean?
or in general
in general
Graphene has a hexagonal structure
On having this app for quite a bit time, Haven't realised there's a chat room in it.
what is biological synthesis of nanoparticles
Sanket Reply
what's the easiest and fastest way to the synthesize AgNP?
Damian Reply
types of nano material
abeetha Reply
I start with an easy one. carbon nanotubes woven into a long filament like a string
many many of nanotubes
what is the k.e before it land
what is the function of carbon nanotubes?
I'm interested in nanotube
what is nanomaterials​ and their applications of sensors.
Ramkumar Reply
what is nano technology
Sravani Reply
what is system testing?
preparation of nanomaterial
Victor Reply
Yes, Nanotechnology has a very fast field of applications and their is always something new to do with it...
Himanshu Reply
good afternoon madam
what is system testing
what is the application of nanotechnology?
In this morden time nanotechnology used in many field . 1-Electronics-manufacturad IC ,RAM,MRAM,solar panel etc 2-Helth and Medical-Nanomedicine,Drug Dilivery for cancer treatment etc 3- Atomobile -MEMS, Coating on car etc. and may other field for details you can check at Google
anybody can imagine what will be happen after 100 years from now in nano tech world
after 100 year this will be not nanotechnology maybe this technology name will be change . maybe aftet 100 year . we work on electron lable practically about its properties and behaviour by the different instruments
name doesn't matter , whatever it will be change... I'm taking about effect on circumstances of the microscopic world
how hard could it be to apply nanotechnology against viral infections such HIV or Ebola?
silver nanoparticles could handle the job?
not now but maybe in future only AgNP maybe any other nanomaterials
I'm interested in Nanotube
this technology will not going on for the long time , so I'm thinking about femtotechnology 10^-15
can nanotechnology change the direction of the face of the world
Prasenjit Reply
At high concentrations (>0.01 M), the relation between absorptivity coefficient and absorbance is no longer linear. This is due to the electrostatic interactions between the quantum dots in close proximity. If the concentration of the solution is high, another effect that is seen is the scattering of light from the large number of quantum dots. This assumption only works at low concentrations of the analyte. Presence of stray light.
Ali Reply
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit Reply
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Source:  OpenStax, Economic and management sciences grade 9. OpenStax CNX. Sep 15, 2009 Download for free at http://cnx.org/content/col11074/1.1
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