Business Forms in South Africa:
Natural person individual person that has rights and duties.
Juristic person legal person, not have physical existence but possesses
own legal personality, enables it to acquire rights & incur obligations that
separate + distinct from directors and shareholders of co.
*Foreign co. and trusts = legal persons, Co. Act 71 of 2008.
Sole Proprietorship busi. run by sole person in own name, not as co., CC
or busi. trust.
Partnership relationship resulting from agreement/contract … carrying on
of busi., to which each partners contributes, in common for joint benefit of
party’s w/ view to making profit.
Company structure endorsed by law w/ capacity to acquire legal rights +
subject to legal duties.
Closed Corporation CC Act of 1984
Joint & several liability when 2/+ debtors each liable severally
(separately) AND liable jointly, w/ effect that creditor has option of suing 1/+
of debtors severally OR all debtors jointly for payment of debt.
Limited liability of shareholder & members concept that shareholders
of co./members CC not liable for debts of co./CC.
Perpetual Succession legal continuity, describes status of business
structure such as co./CC whose legal existence unaffected by changes in
shareholders/members.
Entrepreneur looks @ before choosing busi. structure:
Risk capital + growth management + control perpetual succession tax legal
+ admin formalities + costs.
Separate legal personality – 1. Juristic person = separate from members +
directors + shareholders + creditors.
2. Limited liability (shareholder personal A protected = investment lost).
3. A = exclusive property of co. (need proper authorisation).
4. Debts = owed by co.
5. Rights = privacy + good name (reputation).
6. Sue/be sued in OWN name.
Exception: pierce corporate veil to hold members/directors personally liable.
7. Perpetual succession = busi. continuity (change ownership not change
existence).
8. NO arms or legs act perf. by agents.
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