Ownership

Forms of ownership

A form of ownership is who legally owns the business and who must pay its debts: a sole trader, a partnership, a private company, or a co-operative.

CAPS

Grade 10 · Business Studies · Ownership

Business Studies answers in business language, applied to the scenario.

  • The papers

    Paper 1 is business environments and business ventures. Paper 2 is business roles and business operations. Each paper is 150 marks.

  • A 40-mark essay

    Introduction 2 marks: say what the essay will deal with. Body: facts from the scenario, each with an explanation of the impact or the solution. Conclusion 2 marks: a decision, not a new fact. Insight is 4 marks for layout, analysis, synthesis and originality.

  • How a marker reads it

    A common mix-up is to treat a private company as just a bigger sole trader. The company is a separate debtor. A journal entry for buying a till does not choose the form.

Quotes from a scenario must be used, not copied as decoration. A definition with no link to the business in the question stays in the low marks.

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Worked theory

Worked theory. Two friends in Mbombela want a hardware store that will owe a supplier about R80 000 for the first stock. As a sole trader, only one of them owns it and that person's house can be sold if the store cannot pay. As a partnership, both can be held for the full R80 000, even if they agreed to split it. As a private company, the company owes the supplier, and the friends lose the money they put in, not automatically the houses, if they keep company money and personal money apart. They pick the private company because the debt is larger than either of them can carry alone.

More worked examples

  • A taxi and one owner

    A driver in Mamelodi owns one taxi in his own name. Fares are his profit after fuel and the driver's pay. When the taxi smashes a wall, the claim arrives in his name, not in a company's name. That is a sole trader. There is no second owner to share the loss, and there is no separate legal person to hide behind.

  • A stokvel that registers

    Twelve neighbours in Khayelitsha pool money to buy vegetables in bulk and sell to members at cost plus a small margin. They register a co-operative so the surplus is for members, not for one owner's pocket. A partnership would let two of them own it and leave the other ten as customers. The co-operative is the form that matches a group trading for itself.

In ordinary words

A sole trader is one person. That person keeps the profit and is personally liable for the debts, and the business often stops when that person stops. A partnership is two or more people who share profit by agreement, and each partner can usually be sued for the full debt. A private company is a separate legal person, so the company, not the owners' houses, is the debtor if the company is run as a company. A co-operative is owned by its members for their mutual benefit. The form is chosen for liability, capital, tax and whether the business must outlive the founder.

In South Africa

A hardware store on a Mbombela street, with a supplier's invoice for the opening stock, is where the form of ownership becomes real.

Part 1 / 4

What it is

A form of ownership is who legally owns the business and who must pay its debts: a sole trader, a partnership, a private company, or a co-operative.

More worked examples

Board walkthroughs on this topic. Open one, copy the working, then try the next.

Example 1 / 20

Case study: Lindiwe wants to start a small salon with full control and few legal requirements. Recommend a form of ownership.

How we got there

Read this like a teacher at the board. We go slowly, name every number, and say why we take each step.

Explain in another language · 11

1. What is the question asking?

Read the question twice. Circle the unknown. Underline every number and unit. The paper is asking: Case study: Lindiwe wants to start a small salon with full control and few legal requirements. Recommend a form of ownership.

Before any working — hunt first

Given

Numbers and units already in the sentence: no numbers yet — only a name, a diagram, or a worded unknown. Copy each one into a column. A name without a number is not given.

Missing

After you copy the given, the letter that still has no number is missing. The paper is pointing at: Recommend a form of ownership. Circle that word — that is the missing variable.

Find

We are required to find: Recommend a form of ownership. Write that as a symbol on the left, with a question mark, before you touch a formula.

Calculate

What we need to calculate: Sole trader. Then substitute the given, one line at a time, to get Recommend a form of ownership.

In other words — as if you have never seen this before

If you have never seen this before: Sole trader. We will name a method in words, write the formula with no numbers, then substitute one line at a time.

2. What do we already know?

Small business.

3. Which method — and why this one?

Sole trader.

4. Step-by-step working

  1. 01 / 05

    Apply

    Sole trader: easy to start, owner keeps all profit and decisions.

    Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.

  2. 02 / 05

    Explain

    Disadvantage: unlimited liability.

    Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.

  3. 03 / 05

    Step G — Sense-check the size

    Ask: is this the kind of number a Grade 10–12 paper would want? A speed of 3 000 ms for a learner walking, or a probability bigger than 1, means a unit or algebra slip. Estimate first: round the numbers and do the sum in your head.

    Why this step: Markers write ‘unrealistic’ in the margin when the method is right but the size is wild. A 10-second head check often finds a missing 10² or a unit that never changed.

  4. 04 / 05

    Step F — Box the answer with its unit

    Sole trader.

    Why this step: A number without a unit is half a mark on a Physics paper, and a marker can miss a Maths answer that is buried in working.

  5. 05 / 05

    Step H — What the marker is looking for

    On an NSC memo you usually earn: (1) a method mark for naming the right formula or idea in words, (2) an accuracy mark for substituting the given numbers with units, (3) an accuracy mark for the boxed answer with its unit. Write those three lines even if you are unsure of the arithmetic — blank pages score zero.

    Why this step: First-timers chase the final number and leave the method blank. The memo still pays out for the idea and the substitution even when the last line is wrong.

5. The answer

Sole trader.

Copy onto your answer sheet — in this order

Answer: Sole trader.

6. Check it like a marker

She can register later as a company.

7. A trap first-timers fall into

First-timers often grab the first formula they remember, mix units (cm with m, minutes with seconds), or drop a minus sign. Write the formula in words first: “this equals that, because…”

Ntsako · fx-991ZA PLUS. Tap to calculate.