Business Organisations: notes

Types

• Sole trader: one owner, full control, unlimited liability.
• Partnership: two to twenty partners who share profit and risk.
• Private limited company: shareholders with limited liability; shares are not sold to the public.
• Public limited company: shares sold on the stock exchange.
• Co-operative: members own and run it together.
• Public corporation: owned by the state, such as ZESA.

Key terms

• Limited liability: owners lose only what they invested.
• Dividend: a share of profit paid to shareholders.

Common mistake

Limited liability protects the owner's own belongings; sole traders do not have it.