What is an incorporated company
An incorporated entity is a legal business structure officially registered with a government authority, creating a distinct legal persona separate from its owners (shareholders/members)
What is an unicorporated company
An unincorporated entity is a business or organisation that has not filed formal incorporation papers, meaning it lacks a separate legal existence from its owners
Where in the Consitution is state owned companies contemplated?
State-owned companies, organs of state are contemplated in section 239 of the Constitution.
What are the factors of sole propretorship?
- No registration requirements
- The owner and the business are regarded as one
- No existence independent of the proprietor.
- The business does not enjoy perpetual succession - when the proprietor dies, the business also ceases to exist.
- The owner and the business are taxed as one by the South African Revenue Service (SARS).
- The business is subject to minimal regulation.
- All the profits are the sole proprietors
How does the trust Property Control Act define a trust
The Trust Property Control Act, 1988 defines a trust as the arrangement through which the ownership in property of one person is, by virtue of a trust instrument, made over or bequeathed to another person, the trustee, in whole or in part to the beneficiaries designated in the trust instrument, which property is placed under the control of another person, the trustee
A trust used as a business in order to?
- A trust is used as a business in order:
- to protect personal assets against the risk of the business failing
- to ensure the continuity of a business
- to limit estate duty and other taxes.
- Debtors cannot come after a person’s assets. Only allowed to attempt to attach the assets in the business trust.
- Tax advantages include the fact that a trust is not subject to estate duties, value-added tax (VAT) or capital gains tax when the estate is wound up.
- Flexibility of a trust, compliance obligations and optimal use of a trust
- New partners and beneficiaries can be added or removed according to what the trust deed specifies.
- A trust does not have to comply with the Companies Act, 2008.
What was held in Raath about a trust estate?
In Raath v Nel 2012 it was established that a trust estate, comprising of an accumulation of assets and liabilities, is a separate entity, although deprived of legal personality. The core concept of a trust is the separation of ownership or control from enjoyment
What are the types of trusts?
- An ownership trust
- A bewind trust
- A curatorship trust
What does an ownership trust mean?
the founder or settlor transfers ownership of assets or property to a trustee to be held for the benefit of defined or determinable beneficiaries of the trust.
What is bewind trust
the founder or settlor transfers ownership of assets or property to beneficiaries of the trust, but control over the property is given to the trustee
What is a curatorship trust
Curatorship trusts are established under the arrangement where the trustee administers the trust assets for the benefit of a beneficiary who does not have the capacity to do so
What is a close corporation?
A Close Corporation is a form of business undertaking suitable for small entrepreneurs was provided for by legislation. No Close Corporations can be registered from 2011
What is a trust as defined by Companies Act?
Section 1 of the Companies Act, 2008, defines a trust as a juristic person. This is only for the purpose of the Act.
