Business Studies·Forms of business organisations · NSSCO 2.1
Private & public limited companies; divorce of ownership from control
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A sole trader risks everything they own, but there is a cleverer way to run a bigger business: turn it into a limited company. In this lesson we build the two big ideas of a company — that it is a separate legal person, and that it gives its owners limited liability — then compare the private limited company (Pty Ltd) with the public limited company (Ltd) listed on the NSX. Finally we meet a puzzle that grows with every big company: how ownership becomes divorced from control, and we weigh up what really changes when a business moves from one form to another.
What you'll learn in this lesson
By the end you should be able to (NSSCO Business Studies 2.1):
- Describe the main characteristics, advantages and disadvantages of private limited companies
- Describe the main characteristics, advantages and disadvantages of public limited companies
- Explain how ownership becomes divorced from control as business grows
- Evaluate the implications resulting from changing from one form of ownership to another
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