Brief Summary

1) A company is a body of persons joined together for purposes of business or trade.

2) There are several types of companies: a limited liability company, which may be formed as a public company or as a proprietary company. Besides, there are such types of business organisations as single proprietorships and partnerships.

3) To form a company it’s necessary to file with the Corporate Affairs Commission the necessary documents.

4) The formation of a company is a costly step.

5) The necessary costs include a variety of payments.

6) These expenditures are recorded by debiting an Intangible Assets Account.

7) The company has the following advantages:

1. Greater amounts of capital can be gathered together.

2. Limited liability.

3. Shares in a public listed company are readily transferable.

4. Continuous existence.

5. Centralized authority.

6. Professional management.

8) The disadvantages of the company include:

1. Heavy taxation.

2. Greater regulation.

3. Separation of ownership and control.