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Summary Owner's Equity, Non-current liabilities and Companies Part 1 $14.18   Add to cart
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  3. University Of The Witwatersrand (wits)
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  5. Financial Accounting 1 (ACCN1010)

Summary

Summary Owner's Equity, Non-current liabilities and Companies Part 1
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  • Course
  • Financial Accounting 1 (ACCN1010)
  • Institution
  • University Of The Witwatersrand (wits)

This document provides an in-depth explanation of owner's equity, non-current liabilities, and companies. The different types of shares are discussed along with their journal entries. The issuing of debentures are also illustrated with journal entries.

Last document update: 10 months ago

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Document information

  • January 15, 2024
  • January 16, 2024
  • 16
  • 2023/2024
  • Summary

Subjects

  • companies

Written for

  • University of the Witwatersrand (wits)
  • Financial Accounting 1 (ACCN1010)
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Owner’s equity, Non-current liabilities
and Companies
What is a company?

1. Legal entity
• Company is a juristic person (exists separate from owners).
2. Assets = the company's not shareholders'
3. Liabilities = the company's not shareholders'
4. Companies Act 71 of 2008
5. Owners and management = SEPARATE
• Managers decide whether or not to declare dividends.
6. Perpetual succession
• If shareholder passes away, the company continues in existence.


Companies by law:

• In SA, companies are regulated by:
o The Companies Act 71 of 2008.
o Companies Amendment Act 3 of 2011.


• Companies Act requirements for and audit:
o Required only for public companies.
o Private companies are only subject to an audit if regarded as being in the
public interest.
o As alternative to an audit, Companies Act provides for an independent review
for companies with a low public interest score.

Formation of a company:

• Companies Act requires all companies to have a Memorandum of Incorporation
(MOI).
o The governing document of a company.
o The company may accept/alter the default rules provided by the Companies
Act.
o It is a set of rights, duties and responsibilities of shareholders, directors and
others within an in relation to a company.
o Its purpose is to protect the interests of shareholders.
o MOI may not override the provisions of the Companies Act.

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