Chapter 3 - Chapter 3 THE ESTABLISHMENT OF A BUSINESS...

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Chapter 11: Strategic Leadership Chapter 3 © Oxford University Press Southern Africa, 2008. All rights reserved. THE ESTABLISHMENT OF A BUSINESS
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Chapter 11: Strategic Leadership CHAPTER CONTENT Introduction The legal form of ownership Developing the business plan for the new business The location of the business © Oxford University Press Southern Africa, 2008. All rights reserved.
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Chapter 11: Strategic Leadership THE LEGAL FORM OF OWNERSHIP Considerations in choosing a form of enterprise: Legal personality Extent of liability of the business owner Degree of control or management authority Potential for capital acquisition Legal and regulatory requirements Taxation Transferability of interests
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Chapter 11: Strategic Leadership SOLE PROPRIETORSHIP Advantages Simple to create Least expensive way to start a business Owner has total decision making authority No special legal restrictions Easy to discontinue Disadvantages Owner is personally liable Limited diversity in skills and capabilities is available Owner has limited access to capital Lack of continuity
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Chapter 11: Strategic Leadership PARTNERSHIP Advantages Ease of formation Diversification of skills and abilities of partners Increased opportunity for accumulation of capital Minimal legal formalities and regulation Disadvantages Personal liability of partners Relative difficulty in disposing an interest in the partnership Potential for conflict between partners Lack of continuity
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Chapter 11: Strategic Leadership THE CLOSE CORPORATION Advantages Relative ease of formation
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