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Business Organisations (Formalities (Characteristics of a Company (All…
Business Organisations
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Formalities
a) Sole Proprietorship/Partnerships must be "registered". Registration is required under the Business Registration Act. Any contracts entered into are not enforceable - Section 17 Business Registration Act.
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Private Company
Certain characteristics - Section 18(1)
- There is a restriction on the right to transfer its shares
- Maximum number of members is 50
- Cannot invite public to subscribe for shares or take up debentures
- Cannot invite public to deposit money
In addition, a private company may be exempt or non-exempt. An exempt private company has these additional characteristics: No shares in the company are held by corporations. - Not more than 20 members. - Or is a private company owned by government and gazetted as an exempt private company.
Public Company
A public company may have more than 50 members. A public company may be listed or unlisted. This refers to whether the shares of the company are traded on any stock exchange. If they are, we say that the company is a "public listed" company. If they are not, it is called a "public" company.
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