[go: up one dir, main page]
Scribd
Upload
29 views2 pages

Business Structures Overview

The document discusses the four basic forms of business structure: sole trader/single proprietorship, partnership, and company/corporation. It outlines the key characteristics of each: sole traders have no separate legal entity and unlimited liability; partnerships also have no separate legal entity and unlimited liability, with co-ownership of assets and profits; companies have a separate legal entity, limited liability, and ownership is separated from management. The document also covers different types of companies and components of company capital like share capital and reserves.

Uploaded by

Misu Nguyen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
29 views2 pages

Business Structures Overview

The document discusses the four basic forms of business structure: sole trader/single proprietorship, partnership, and company/corporation. It outlines the key characteristics of each: sole traders have no separate legal entity and unlimited liability; partnerships also have no separate legal entity and unlimited liability, with co-ownership of assets and profits; companies have a separate legal entity, limited liability, and ownership is separated from management. The document also covers different types of companies and components of company capital like share capital and reserves.

Uploaded by

Misu Nguyen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 2

CHAPTER 2

Different Accounting Entities


CLASS NOTES

Four Basic Forms of Business Structure


Sole Trader or Single Proprietorship
Partnership
Company or Corporation

1.) Sole Trader

Characteristics:
No Separate Legal Entity
Limited Life
Unlimited Liability
Minimum Reporting Regulations
Limited Access to Funds
Lower Cost to Establish

Vocab Check!

What is Legal Entity?

What is Unlimited Liability?

2.) Partnership

Characteristics:
No Separate Legal Entity
Limited Life
Unlimited Liability
Co Ownership of Assets
Co Ownership of Profits
Limited Membership
Increased Regulation
Mutual Agency

Partnership Agreement

Vocab Check!

Mutual Agency?

ACCT 2105 Introductory Accounting Chapter 2 - CLASS NOTES 1


3.) Company

Characteristics:
Separate Legal Entity
Unlimited Life (Perpetual Life)
Limited Liability
Company Ownership of Assets
Company profits belong to shareholders
Extensive Membership
Separation of ownership and management
Extensive regulation

Types of Companies
1.) Proprietary Companies (Pty Ltd.) or Private Companies

2.) Public Companies

CAPITAL (OWNERS CLAIM) OF LIMITED COMPANIES

Share Capital

o Ordinary Shares

o Preference Shares

Reserves

o Retained profit
o General Reserve
o Asset Revaluation
o Others

Bonus Shares

Rights Issues -

Share Transfers -

ACCT 2105 Introductory Accounting Chapter 2 - CLASS NOTES 2

You might also like