12 Questions
What is a sole proprietorship?
A business format owned and managed by one individual.
Why is a sole proprietorship popular among small business owners?
No large capital investment is required.
What must the business owner do to operate a sole proprietorship legally?
Apply for a trading license and register the trading name.
What is the main disadvantage of a sole proprietorship in terms of liability?
The owner is personally liable for all business matters.
How does the lifespan of a sole proprietorship relate to the owner?
The business has the same lifespan as the owner.
What is the only way a sole proprietorship can continue after the owner's passing?
Through a transfer of ownership, possibly included in the owner's will.
What is the importance of a sole proprietor keeping business and personal records separate?
To assist the owner in expanding the business using profits obtained through business operations.
Why is it a challenge for sole proprietors to obtain financing from major banks?
Major banks consider the business owner's personal bank profile before lending money.
What is a key characteristic of a partnership?
Each partner contributes something to the partnership.
What legal framework governs partnerships in South Africa?
Partnerships operate within the legal framework of the South African Companies Act 17 of 2008.
What advantage does having unlimited partners bring to a partnership?
Increased diversification in the partnership as more capital, knowledge, competencies, and resources are made available.
How is a partnership defined?
A contractual or verbal agreement between two or more parties (individuals or organisations) to establish a new for-profit business.
Explore the various types of business formats like sole proprietorship and understand their advantages and disadvantages. Learn why sole proprietorship is popular among small business owners due to its simplicity and affordability.
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