Brand Champion Harare

16/08/2022

Quote of the day

15/08/2022

Quote of the day.

15/08/2022

Simbisa Brands 's Inn Bucks is back . The group issued a press statement today.

05/08/2022

Forms of Business Organizations ( Part 3 )
Incorporated Businesses : Companies
A company is formed when two or more individuals come together and subscribe for shares of the company . The individuals who buy shares within a company are called shareholders . A shareholder is given what is known as a share certificate . The main feature of these types of companies is the aspect of limited liability . Limited liability only exists on incorporated businesses .

Limited Liability
A Limited liability company is a business structure , that protects owners from personal responsibility for its debts or liabilities . Limited liability companies owners will only loose those funds they will have invested in the business , their personal possessions , such as cars and houses will not be affected should the business fail to pay its debts or obligations .

Types Of Companies .
There are two types of companies , Private Limited Companies and Public Limited Companies . We will look at the distinction between those companies at a later stage .
Watch more information about companies on https://www.youtube.com/watch?v=g7SItIuklbE

Ownership Of Companies .
Companies are owned by shareholders who subscribe for shares within the company . Some companies have several shareholders who are scattered around the globe who own the company . For that reason companies are sometimes known as joint-stock companies due to the fact that the company is jointly owned together with a number of other shareholders . Stock is an alternative name for shares . Shares are listed on the stock exchange , which is a market for various listed stocks (shares )

Control .
There is divorce between ownership and control of the companies . The control is vested in the hands of the Directors .The Directors are appointed by the sh./a

Types Of Shares .
Basically there are two main types of shares : Ordinary shares and preference shares.

Ordinary Shares
Ordinary shareholders are the real owners of a business . The ordinary shareholders have voting rights at the Annual General Meeting ( AGM) of the company . The AGM is where the auditors and directors of the company are elected . The ordinary shareholders will get their dividends after payment is done to preference shareholders . If the company makes a loss , then the ordinary shareholders will not be paid any dividends . If the company makes more profits , these shareholders will get more dividends . Apart from the dividends , the shareholders can benefit from the appreciation in value of shares on the stock exchange . Suppose you buy your shares for R10 per share and after six years , the value may have appreciated to R14 per share . The capital gains will therefore be between R10 and R14 , which is R4 per every share purchased .

Preference Shares .
Preference shareholders are called preference , due to the fact that they have a first preference or priority over the ordinary shares . Preference shareholders get a fixed rate of a dividend . They receive their dividends , before dividends are paid to the ordinary shareholders . Let us now consider the different types of preference shares .

Types of Preference Shares .
a) Cumulative preference shares . If the company makes a loss , the dividends on cumulative preference shares can be carried forward to the next accounting period .
b) Non-cumulative preference shares . If a company makes a loss within a given financial year , the dividends cannot be carried forward to the next accounting period .
c) Participating preference shares . In addition to getting a fixed rate of dividend , these shareholders also get an additional dividend which is paid to them after dividends are paid to the ordinary shareholders .
d) Redeemable preference shares . To redeem is to buy back . So a company is allowed to issue shares which can be repurchased in future at a given date . These are preference shares which a company will buy back at a future date . In the next series we will now look at the articles and memorandum of association as well as the main differences between private limited companies and public limited companies .Contact us today to have your company registered .

For feedback , comments , questions whatsapp the writer Divine Marufu on 0776751735 .

04/08/2022

Forms of Business Organizations ( Part 2 )
Partnership Business .
A partnership is formed when two or more people come together to run a business with the aim of making a profit . Partnerships are mainly found in businesses such as those of lawyers , accountants , hair dressers , web designers and so on .
Partnership Deed .
When forming a partnership a document known as a partnership deed is used , it governs all the internal processes and rules of the partnership . A partnership deed will cover the following matters :
i)The ratio in which profits and losses are to be shared .
ii) The amount of capital to be contributed by each partner
iii)The circumstances under which the partnership can be dissolved or terminated .
iv)The procedures to be followed when a partnership is dissolved or terminated .
v)The interest to be paid on drawings made by partners .
vi) The salaries to be paid to the partners , if any .
vii) The interest to be paid on capital contributions made by the partners .
If you require a partnership deed to be prepared for you , please get in touch with Brand Champion on 0776751735 .

Types Of Partners .
In general partners suffer from unlimited liability . Unlimited liability - if a business fails to pay its debts or obligations , the owners of the business will loose the funds they have invested in the business as well as personal possessions like houses , cars and so on . Limited liability on the other hand results in a situation were the owners of a business (partners ) will only loose those funds they will have invested in the business - personal possessions of will be attached by the creditors and sold to cover for the debts .In general , there are two types of partners .
a)Limited Partners . If the business fails to pay its debts , these partners will only loose those funds they will have invested in the business . In most cases these partners only contribute capital , but they will not be actively involved in the running of the business , that is why they enjoy the benefits of limited liability .
b)Unlimited Partners . If the business fails to pay its debts , the unlimited partners will loose their capital contributions together with any of their personal possessions .
Advantages of Partnerships .
1. Bridging the knowledge and skills gap : Partners are able to share expertise on different areas within the business .
2. More Capital is raised . Partnerships can raise more amount of capital compared to other forms of business like sole traders .
3. Sharing of risk and responsibilities . Partners are able to share the duties and responsibilities when running the business .
4. New Perspectives . A partnership can bring a new and divergent view on different things . This may assist on gaining a new perspective or outlook on a number of areas .
5. Moral support . Partners will support each other in times of difficulties and challenges , setbacks or dealing with jobs and everyday disappointments .
Disadvantages of Partnerships
1. Difficulty In Transfer Of Ownership . Transferring ownership is complicated since a dissolution of one partnership will mean that another partnership will have to be formed with assets being revalued and so .
2. Disagreements between partners can result in dissolution or wounding-up of the partnership .
3. Unlimited liability . If the business fails to pay its debts the partners will also loose those funds they will have invested in the business together with their personal possessions .
4. Capacity to raise funds is limited . A partnership’s ability to raise more amount of capital is limited compared to other forms like limited companies .
5. General partners are responsible for other partners actions . The actions and deeds of each partner will bound the other partners within the business . So if a partner gets a loan from the bank and converts the funds received for personal use , the other partners will still be liable to pay for the obligations arising from the loan .
Click this link to watch more about different forms of business organizations https://www.youtube.com/watch?v=VrD5LdmL94k and https://www.youtube.com/watch?v=L_2DisaIiqs .

For feedback , comments , questions whatsapp the writer Divine Marufu on 0776751735 .

Public Sector, Private Sector, Sole traders, partnerships ,

03/08/2022

Your most unhappy customers are your greatest source of learning. - Bill Gates.

02/08/2022