BUSINESS STUDIES

GRADE 12

TERM THREE:
2024 REVISED NOTES

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

Table of Contents
1. CHAPTER 12:HUMAN RIGHTS,INCLUSIVITY AND ENVIRONMENTAL
ISSUES .......................................................................................................................
1.1 HUMAN RIGHTS IN THE WORKPLACE .....................................................................
1.2 ECONOMIC RIGHTS OF EMPLOYEES IN THE WORKPLACE .........................................
1.3 SOCIAL RIGHTS OF EMPLOYEES IN THE WORKPLACE ..............................................
1.4 WAYS TO PROMOTE SOCIAL RIGHTS IN THE WORKPLACE ........................................
1.5 WAYS TO PROMOTE CULTURAL RIGHTS IN THE WORKPLACE ...................................
1.6 IMPLICATIONS OF EQUALITY, RESPECT AND DIGNITY FOR BUSINESSES .....................
2. DIVERSITY IN THE WORKPLACE.......................................................................
2.1 THE MEANING OF DIVERSITY ...............................................................................
2.2 DIVERSITY ISSUES IN THE WORKPLACE .................................................................
2.3 DEALING WITH DIVERSITY ISSUES IN THE WORKPLACE ...........................................
2.4 BENEFITS OF DIVERSITY IN THE WORKPLACE ........................................................
3. ENVIRONMENTAL ISSUES ................................................................................
3.1 RESPONSIBILITIES OF EMPLOYERS IN PROMOTING HUMAN HEALTH AND SAFETY IN THE
WORKPLACE ........................................................................................................
3.2 ROLES OF HEALTH AND SAFETY REPRESENTATIVES IN PROTECTING THE WORKPLACE
ENVIRONMENT .....................................................................................................
3.3 RESPONSIBILITY OF WORKERS IN PROMOTING HUMAN HEALTH AND SAFETY IN THE
WORK PLACE........................................................................................................
3.4 WAYS IN WHICH BUSINESSES COULD PROTECT THE ENVIRONMENT AND PROMOTE
HUMAN HEALTH IN THE WORKPLACE .......................................................................

CHAPTER 13: CSR/CSI ..............................................................................................

1. SOCIAL RESPONSIBILITY ..................................................................................
1.1 RELATIONSHIP/LINK BETWEEN TRIPLE BOTTOM LINE AND SOCIAL RESPONSIBILITY ....
1.2 STRATEGIES TO DEAL WITH HIV/AIDS, UNEMPLOYMENT & POVERTY .......................
1.3 WAYS IN WHICH BUSINESSES COULD CONTRIBUTE TO THE WELLBEING OF THEIR
EMPLOYEES ................................................................................................................
1.4 CONTRIBUTION OF TIME AND EFFORT IMPROVING THE WELLBEING OF THE
COMMUNITY ................................................................................................................

2. COOPERATE SOCIAL RESPONSIBILITY/CSR ..................................................

2.1 MEANING OF CSR .............................................................................................
2.2 PURPOSE OF CSR .............................................................................................
2.3 COMPONENTS OF CORPORATE SOCIAL RESPONSIBILITY (CSR) ............................
2.4 IMPACT OF CSR/CSI ON BUSINESSES .................................................................
2.5 IMPACT OF CSR/CSI ON THE COMMUNITY ...........................................................

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

3. COOPERATE SOCIAL INVESTMENT /CSI .........................................................

3.1 THE MEANING OF CSI ........................................................................................
3.2 PURPOSE OF CSI ..............................................................................................
3.3 CSI FOCUS AREAS .............................................................................................
3.4 DIFFERENCES BETWEEN CORPORATE SOCIAL RESPONSIBILITY (CSR) AND
CORPORATE SOCIAL INVESTMENT (CSI) .......................................................................
CHAPTER 14: PRESENTATION AND DATA RESPONSE .......................................
1. PRESENTATION...................................................................................................
1.1 FACTORS TO BE CONSIDERED WHEN PREPARING FOR A PRESENTATION ..................
1.2 FACTORS TO CONSIDERED BY THE PRESENTER WHILE PRESENTING ........................
1.3 RESPONDING TO QUESTIONS AFTER THE PRESENTATION IN A PROFESSIONAL
MANNER......................................................................................................................
1.4 IMPROVEMENT OF THE NEXT/ FUTURE PRESENTATION ...........................................
2. DATA RESPONSE ................................................................................................
2.1 ASPECTS TO BE CONSIDERED WHEN DESIGNING A MULTIMEDIA PRESENTATION ........
2.2 EXAMPLES OF NON-VERBAL PRESENTATION METHODS ..........................................
2.3 ADVANTAGES OF USING VISUAL AIDS IN ANY PRESENTATION ..................................
2.4 IMPACT OF EACH VISUAL AIDS..............................................................................
CHAPTER 15: FORMS OF OWNERSHIP

1.1 MEANING OF LIMITED AND UNLIMITED LIABILITY………………………………………

1.2 CHARACTERISTICS AND IMPACT OF EACH FORM OF OWNERSHIP .............................
1.3 CRITERIA/FACTORS CAN CONTRIBUTE TO SUCCESS OR FAILURE OF EACH FORM OF
OWNERSHIP ................................................................................................................

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

BUSINESS ROLES PAPER 2

CHAPTER 12: HUMAN RIGHTS, INCLUSIVITY AND ENVIRONMENTAL

ISSUES

EXAMINATION GUIDELINES CONTENT DETAILS FOR TEACHING, LEARNING AND

ASSESSMENT PURPOSES

HUMAN, ECONOMIC, SOCIAL AND CULTURAL RIGHTS

• Outline/Name the following human rights in the workplace:
o Privacy
o Dignity
o Equity
o Freedom of speech and expression
o Information
o Safety, security and protection of life
• Identify the above-stated human rights from given scenarios /statements.
• Recommend ways in which businesses could deal with the above-stated human rights
in the workplace.
• Outline/State the economic rights of employees in the workplace.
• Outline/State the social rights of employees in the workplace.
• Recommend ways in which businesses could promote social rights and cultural rights
in the workplace.
• Explain the implication of equality, respect and dignity on businesses.

DIVERSITY
• Define/Elaborate on the meaning of diversity in the workplace
• Identify/Name the following diversity issues from given scenarios/statements:
o Poverty, race
o Gender, language, age,
o Culture/religion and
o Disability
• Recommend/Suggest ways in which businesses could deal with the above-stated
diversity issues in the workplace.
• Discuss the benefits of diversity in the workplace

ENVIRONMENTAL FACTORS
• Explain the responsibilities of employers in promoting human health and safety in the
workplace. Outline/Explain/Discuss the roles of the health and safety representatives
in protecting the workplace environment, e.g. checking on the effectiveness of health
and safety measures/identifying potential dangers in the work environment/
investigating workers' complaints, etc.
• Identify the roles of health and safety representatives from given scenarios.
• Explain the responsibilities of workers/employees in promoting human health and
safety in the workplace.
• Identify the responsibilities of employers and employees/workers in promoting human
health and safety in the workplace from given scenarios.
• Recommend/Suggest strategies businesses may use to protect the environment and
human health.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

• Assess a business venture on human rights, inclusivity, and environmental issues,

using informal surveys, interviews, etc.

TERMS AND DEFINITIONS

TERM DEFINITION
Human rights The rights of all human beings irrespective of their
gender/race/nationality or any other status.
Inclusivity Means that no one should be excluded because of their gender/age/race/
language/disability.
Environmental Relate to preserving a clean/safe/sustainable environment.
issues
Diversity It means the workforce must include groups of a variety of people
who are different in race/gender, class etc.
Poverty Being unable to satisfy basic needs due to lack of income to buy
goods/service
Inequality Unfair differences between groups of people in society/When some
have access to more wealth/status/opportunities than others.
Race Classification of people according to their physical differences e.g.
colour of their skin.
Gender Refers to being male or female.
Disability A physical or mental condition that limits a person's movements,
senses, or activities.
Religion A belief in and worship of a superhuman controlling power,
especially a personal God.
Age The length of time that a person has lived or a thing has existed.
Culture The ideas, customs, and social behaviour of a particular people or
society.
Equality The fact of being equal in rights, status, advantages etc.
Respect A polite behaviour towards or care for somebody/something that you
think is important.
Dignity A calm and serious manner that deserves respect.
Economic The rights each person has to be economically active.
rights
Social rights Right to welfare benefits.
Cultural rights A right to participate in cultural activities and events of your choice.

HUMAN, ECONOMIC, SOCIAL AND CULTURAL RIGHTS

INTRODUCTION
Human rights are basic rights that are enshrined in the South African constitution. They
are the fundamental rights and standards of treatment that are internationally
recognised as belongings to all human beings by virtue of being human. Respect for
human rights and the establishment of fair labour practices is vital for businesses.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

HUMAN RIGHTS
• Human rights are rights that everyone must enjoy by mere fact that they are
human beings
• They are protected by the Bill of Rights contained in chapter two of the
constitution of the Republic of South Africa.

HUMAN RIGHTS IN THE WORKPLACE

The following human rights are applicable in the workplace:
• Privacy
• Dignity
• Equity
• Freedom of speech and expression
• Information
• Safety/Security and protection/Life
Note: (These human rights should be viewed in the context of the
business /workplace)

WAYS IN WHICH BUSINESSES COULD DEAL WITH THE ABOVE-STATED

HUMAN RIGHTS IN THE WORKPLACE.

Privacy
• Businesses may not violate the rights of the employees and clients.
• They should not provide personal information about employees to anyone
else.
• Information on employees who have disclosed their HIV/Aids status/any
chronic
illness must be kept confidential.
• It is illegal to read other people's emails/record conversations unless stated
clearly and upfront.

Respect/Dignity
• Businesses must treat all employees with respect/dignity regardless of their
socio-economic status.
• They should not force workers to do embarrassing or degrading work.

Equity
• Businesses must give equal opportunities/not discriminate against their
employees on the basis of gender/race/religion/sexual orientation, etc.
should ensure that no employee suffers because of discrimination.
• Equal pay for work of equal value.
• They should apply relevant legislation fairly on all levels.

Freedom of speech and expression

• Businesses should allow open communication channels between
management
and employees.
• They should give employees a platform to raise their grievances without any
victimisation.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

• An employee should not be punished/discriminated against for voicing their

opinion.

Information
• Workers should have access to information, including all information held by
the government, e.g. policies/work schedules/employment contracts/labour
laws such as BCEA/EEA/SDA, etc.
• Business needs to be transparent in their financial statements/Employees
may request to see these statements with motivation.
• Employees should be informed/updated as new information becomes
available.

Safety, security and protection of life

• Employees should work in a safe working environment free from hazardous
products/areas.
• Provide workers with protective clothing, e.g. gloves and footwear, etc.
• Comply to safety legislation such as OHSA/COIDA, etc.
• Take precautionary measures to ensure employees and their belongings
are safe in the workplace.

ECONOMIC RIGHTS OF EMPLOYEES IN THE WORKPLACE

• Free from forced labour.
• Free to accept/choose work.
• Fair wages/Equal pay/Equal pay for work of equal value.
• Reasonable limitation of working hours.
• Fair labour practice.
• Safe/Healthy working conditions.
• Join/Form trade unions.
• Right to participate in a legal strike

SOCIAL RIGHTS OF EMPLOYEES IN THE WORKPLACE

• The right to healthcare, food, water and social security
• The right to choose and practice religion
• The right to education

WAYS TO PROMOTE SOCIAL RIGHTS IN THE WORKPLACE

• Businesses should ensure that employees have access to clean water/social
security.
• Encourage employees/Provide opportunities for skills training/basic education.
• Register workers with UIF to provide adequate protection in the event of
unemployment/illness.
• Encourage employees to participate in special events, e.g. World Aids day.
• Provide health care services by establishing site clinics to give employees
access to basic medical examinations.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

WAYS TO PROMOTE CULTURAL RIGHTS IN THE WORKPLACE

• Provide the environment in which employees are free to use their own language
when interacting with others during their free time.
• Businesses should encourage employees to attend/ participate in cultural
activities.
• Allow employees to provide solutions to challenges from their own cultural
perspective.
• Regular cultural information sessions will help employees to respect each
other's culture in the workplace.
• Make provision for different cultures, such as food served in the
canteen/entertainment at staff functions.
• Businesses should employ people from various cultural backgrounds.
• Employees should be trained on cultural tolerance/ Business policies should
promote cultural tolerance.
• Have a flexible dress-code policy that allows employees to wear suitable
cultural regalia/accessories.

IMPLICATIONS OF EQUALITY, RESPECT AND DIGNITY FOR BUSINESSES

• Businesses should treat all their employees equally, regardless of their race/
colour/age/gender/disability, etc.
• All workers should have access to equal opportunities/positions/ resources.
• Employers and employees need to comply with legislation with regard to equal
opportunities/human rights in the workplace.
• Businesses should develop equity programmes/promote strategies to ensure
that all employees are treated equally regardless of status/rank/power.
• Mission statement should include values of equality/respect.
• Training/Information/Business policies should include issues such as diversity/
discrimination/harassment.
• Employers should respond swiftly and fairly to reported incidents of
discrimination in the workplace.
• Ensure that employees work in an environment that is conducive to safety/
fairness/free from embarrassment.
• Orders/Tasks should be given respectfully and allow the recipient/employee to
have a say in the manner in which the task should be performed.
• Treat workers with respect/dignity by recognising work well done/the value of
human capital.

INCLUSIVITY
Inclusivity means that no one should be excluded because of their gender/age/race/
language/disability. Businesses can achieve inclusivity by promoting equality, respect
and dignity in the workplace.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

DIVERSITY IN THE WORKPLACE

The meaning of diversity
• Diversity refers to the variety of people employed based on age/race/gender/
ethnic groups/disabilities/material wealth/personalities/how employees see
themselves and others.
• Businesses employ people from different cultural backgrounds.
• Businesses should have systems in place to support diversity issues.

Diversity issues in the workplace

• Poverty
• Race
• Gender
• Language
• Age
• Disability
• Religion
• Culture

Dealing with diversity issues in the workplace

Poverty
• Businesses should employ people from different socio-economic backgrounds/
status.
• Give previously disadvantaged individuals a chance to be educated by
incorporating Adult Basic Education and Training (ABET) into training
programmes of the business.
• Train all employees so that they can be able to deal with retrenchment.
• Reward employees for services well-rendered.
• Ensure that the prices of products are affordable for the identified consumer
market.
• Sponsor learnerships for unemployed people/use grants received from SETAs to
train more unemployed people from local communities.
• Train some unemployed people from local communities as part of a business's
CSI projects.
• Offer subsidised meals/canteen facilities on the premises.
• Supply free uniforms to employees for safety purposes.

Race
• Implement affirmative action policies as required by law.
• No discrimination should be made based on skin colour.
• Comply with the Employment Equity Act and BBBEE when appointing people.
• Ensure that the workplace is diverse by employing people from different race
groups.
• When appointments are made, previously disadvantaged people should get
preferential treatment.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

Gender
• Males and females should be offered equal employment opportunities.
• Business directors should promote both men and women in managerial
positions.
• Women should be employed to comply with EEA.
• Targets may be set for gender equity in the business.
• New appointments should be based on skills and ability.
• Introduce affirmative action by ensuring that male and female employees are
remunerated fairly/equally.

Language
• Business may specify that all communications should be in one specific language
only and would expect employees to have a certain level of fluency in that
language.
• Provide training in the official language of the business.
• Employ an interpreter so that everyone can fully understand what is being said in
a meeting.
• All business contracts should be in an easy-to-understand language and should
be available in the language of choice for the relevant parties signing the contract.
• No worker should feel excluded in meetings conducted in one language only.

Age
• Promotions should not be linked to age, but rather to a specific set of skills.
• A business may not employ children aged 15 or younger.
• The ages of permanent workers should vary from 18 to 65 to include all age
groups.
• A business may employ a person who is older than the normal retirement age,
provided that person is the most suitable candidate.
• Businesses must encourage older employees to help young employees to
develop their potential.
• Young employees must be advised to respect and learn from older employees.
• The business should encourage employees to be sensitive to different
perspectives of various age groups.

Disability/Physically challenged/People living with disability

• Business should provide employment opportunities for people who are physically
challenged.
• Accommodate people who are physically challenged by providing facilities/ ramps
for wheel-chairs, etc.
• Ensure that workers with special needs are not marginalised/feel excluded from
workplace activities.
• Business should be well informed on how to deal with disabled employees.
• Policies and programs should accommodate the needs of people with disabilities.
• Create an organisational culture/climate that is conducive for people with
disabilities.
• Employees should be trained on how to deal with colleagues with disabilities.
• Business should bring in external experts to help with disability and
accommodation issues.
• Ensure that employees with disabilities are treated fairly.

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 BUSINESS STUDIES GR 12 REVISED NOTES 2024

• Focus on skills/work performance of the disabled worker, rather than his/her

disability/ possible problems he/she may pose in future.

Religion/Culture
• Business must be sensitive to special requests from different cultural groups,
e.g. allow day(s) off for cultural holidays/festivals.
• Cater for special food/preparation methods in the workers' canteen.
• Businesses should acknowledge/respect cultural differences of employees.
• The business may not discriminate against employees on the grounds of
their cultural background.
• Business must not force employees to do work that could be against their
religion.

BENEFITS OF DIVERSITY IN THE WORKPLACE

• Workforce diversity improves the ability of a business to solve problems/
innovate/cultivate diverse markets.
• Employees value each other's diversity and learn to connect/communicate across
lines of difference.
• Diversity in the workforce improves morale/motivation.
• Employees demonstrate greater loyalty to the business because they feel
respected/accepted/understood.
• Diversified workforce can give businesses a competitive advantage, as they can
render better services.
• Being respectful of differences/demonstrating diversity makes good business
sense/improves profitability.
• Diverse businesses ensure that its policies/practices empower every employee to
perform at his/her full potential.
• Stakeholders increasingly evaluate businesses on how they manage diversity in
the workplace.
• Employees from different backgrounds can bring different perspectives to the
business.
• A diversified workforce stimulates debate on new/improved ways of getting things
done.
• Employees represent various groups and are therefore better able to recognise
customer needs and satisfy consumers.
• Businesses with a diverse workforce are more likely to have a good public image
and attract more customers.

ENVIRONMENTAL ISSUES
Environmental issues relate to preserving a clean/safe/sustainable environment.
Businesses should assess, control and address all the physical, chemical and
biological factors in the environment.

Responsibilities of employers in promoting human health and safety in the

workplace
• Provide and maintain all the equipment that is necessary to perform the work
• Keep the systems to ensure that there will be no harmful impact on the health
and safety of workers.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

• Reduce/Remove dangers to workers and provide personal protective clothing

• Ensure that the workers’ health is not damaged by hazards resulting from
production /processing/storage/transportation of materials or equipment
• Employers must know where potential dangers might be and take measures to
eliminate or limit the harm
• Workers must be informed /instructed/and supervised to limit potential dangers
to them/Emergency exit door signs should be visible to all employees
• Equipment must be used under the supervision of a designated trained worker
• Comply with safety laws which seek to promote a healthy working environment

Roles of health and safety representatives in protecting the workplace

environment
• Ensure that protective clothing is provided/available to all workers.
• Identify potential dangers that could be harmful to their employees.
• Initiate/Promote/Maintain/Review measures to ensure the health and safety of
• workers.
• Ensure that employers conduct regular review of safety
policies/rules/measures to prevent potential future accidents.
• Check/Monitor the effectiveness of health and safety measures with
management.
• Ensure that all equipment that is necessary to perform the work is provided/
• maintained regularly.
• Promote safety training so that employees may avoid potential dangers/act
proactively.
• Ensure that dangerous equipment is used under the supervision of trained/
• qualified workers.
• Ensure that workers' health and safety is not endangered by hazards resulting
• from production/processing/storage/transportation of material/equipment.
• Work together with the employer, to investigate any accidents/complaints from
• the workers concerning health and safety in the workplace.
• Ensure that employers comply with COIDA/OHASA.
NOTE: (Health and Safety Representatives are elected by co-workers to
act on their behalf in addressing health and safety issues in the
workplace.)

Responsibility of workers in promoting human health and safety in the

workplace
• Workers should take care of their own health and safety in the workplace.
• Co-operate and comply with the rules and procedures, e.g. wear prescribe
safety clothing.
• Report unsafe/unhealthy working conditions to the relevant
authorities/management.
• Report accidents to the employer by the end of the shift
• Use prescribed safety equipment
• Take reasonable care of their own safety
• Inform the employer of any illness that may affect the ability to work.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

Ways in which businesses could protect the environment and promote human
health in the workplace
• Laws and regulations should be adhered to so that profits are not generated at
the expense of the environment.
• Pollution and other environmental issues should always be considered in all
business activities, e.g. safe disposal of waste/dumping of toxic waste, etc.
• Become involved in environmental awareness programmes.
• The environment can be protected by altering production techniques in favour of
cleaner and greener technologies.
• Water for human consumption should be tested before it is used.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

BUSINESS ROLES PAPER 2

CHAPTER 13: CSR/CSICORPORATE SOCIAL RESPONSIBILITY (CSR)/CORPORATE

SOCIAL INVESTMENT (CSI)

EXAMINATION GUIDELINES CONTENT DETAILS FOR TEACHING, LEARNING AND

ASSESSMENT PURPOSES

SOCIAL RESPONSIBILITY
• Define/Elaborate on the meaning of social responsibility.
• Explain the relationship/link between social responsibility and triple bottom line.
• Suggest ways in which a business project can contribute towards the community:
charitable contributions to NGO's, involvement in community education,
employment, and employee volunteer programmes.
• Identify/Name the following socio-economic issues from given
scenarios/statements:
o HIV/Aids
o Unemployment
o Poverty
• Recommend/Suggest ways in which businesses can deal with the above-stated
socio-economic issues.
• Explain/Recommend/Suggest ways in which businesses can contribute time and
effort in improving the well-being of employees and communities.

CORPORATE SOCIAL RESPONSIBILITY/CSR

• Define/Elaborate on the meaning of CSR
• Describe/Explain the purpose of CSR
• Identify/Name/Outline the components of CSR: environment, ethical corporate
social investment, health and safety.
• Identify CSR programmes from given scenarios/statements.
• Explain/Discuss/Evaluate/Analyse the impact (positives/advantages and/or
negatives/ disadvantages) of CSR on businesses and communities

CORPORATE SOCIAL INVESTMENT/CSI

• Define/Elaborate on the meaning of CSI.
• Describe/Explain the purpose of CSI.
• Outline/Name CSI focus areas, e.g. community, rural development, employees,
environment.
• Explain/Distinguish/Differentiate between CSR and CSI.
• Explain/Discuss/Evaluate/Analyse the impact (advantages/positives and/or
disadvantages/ negatives of CSI on business and communities.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

TERMS AND DEFINITIONS

Term Definition
Social responsibility An ethical viewpoint that says every individual/organisation has
an obligation to benefit society as a whole.
Corporate Refers to businesses/firms/organisations.
Corporate social The continuing commitment by business to behave ethically and
responsibility (CSR) contribute to economic development while improving the quality
of life of the local community and society at large.
Corporate social The investment of corporate funds/other assets for the primary
investment (CSI) purpose of achieving social outcomes.
Contemporary Current societal and economic factors that impact on the
Socio-economic business.
issues
Triple bottom line Refers to the 3Ps that businesses should always consider in
their operations, namely, PROFIT, PEOPLE and PLANET.
Sustainability Using the resources in such a manner that future generations
will be able to use them.
Well being Caring for the needs of employees and the communities.
Demographics Statistical data of the population in term of race, age and
income.
Staff turn-over Rate at which the employer must replace their employees.

INTRODUCTION
The idea of giving back to society and contribute to its betterment is vital for every
business. Social responsibility is a moral obligation on businesses/individuals to take
decisions or actions that is in favour and useful to society. It explains accountability
businesses have towards the society. It can take different forms e.g.
avoiding/minimising plastic usage as an effective means to protect the
environment/switch to renewable energy. The main aim of social responsibility is to
strike a balance between personal economic growth and social development.

SOCIAL RESPONSIBILITY
The meaning of social responsibility
• An ethical viewpoint that says every individual/organization has an obligation to benefit
society.
• The responsibility of every citizen individual/organization to contribute towards the well-
being of the community and the environment in which they live.
• It happens when entities participate in activities aiming at society’s welfare and
growth.,

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

Relationship/Link between triple bottom line and social responsibility

Profit/Economic
• Triple Bottom line means that businesses should not only focus on profit/charge
high prices but should also invest in CSI projects.
• Businesses should not make a profit at the expense of its community.

People/Social
• Business operations should not have a negative impact on/exploit people/
employees/customers/community.
• Businesses should engage/invest in sustainable community programmes/ projects
that will benefit/uplift communities.
• Improve the lifestyle/quality of life of their human resources/employees.

Planet/Environment
• Businesses should not exhaust resources/harm the environment for
production/profit purposes.
• They may support energy-efficient/eco-friendly products/production methods.
• Recycle/Re-use waste, e.g. packaging from recycled material.

Example of socio-economic issues from the scenario

SBAA CHICKEN FARM (SCF)

Sbaa Chicken Farm specialises in selling live and slaughtered chickens in the
local township. Some SCF employees stay absent from work on a regular basis
due to illnesses caused by not taking ARV treatment as prescribed. The majority
in the community are not economically active. Some are unable to satisfy basic
need.

Identification of socio-economic issues from the scenario above with

motivation
SOCIO-ECONOMIC ISSUE MOTIVATION
HIV/AIDS Some SCF employees stay absent from
work on a regular basis due to illnesses
caused by not taking ARV treatment as
prescribed.
Unemployment The majority in the community are not
economically active.
Poverty Some are unable to satisfy basic need.
NOTE: Remember to quote as is from the scenario

Strategies to deal with HIV/Aids, unemployment & poverty as socio-economic

issues
Strategies to deal with HIV/Aids
• Counselling programmes/train counsellors to provide infected and affected
persons/employees.
• Develop counselling programmes for infected/affected persons/employees.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

• Conduct workshops on HIV/Aids programmes/campaigns.

• Roll out anti-retroviral (ARV) treatment programmes (ART) for the infected
employees.
• Encourage employees to join HIV/Aids support groups.
• Develop strategies to deal with stigma and discrimination.
• Participate in the HIV/Aids prevention programmes implemented in the
community.
• Support non-governmental organisational/community-based organisation/NPC
HIV/Aids initiatives.

Strategies to deal with unemployment

• Provide skills development programmes through learnerships.
• Offer bursaries to the community to improve the level of education.
• Create jobs for members of the community.
• Provide entrepreneurial programmes that can promote self-employment.
• Support existing small businesses to create more employment opportunities.

Strategies to deal with poverty

• Invest in a young starting SME that can be a business competitor, buyer or
supplier.
• Attract the best employees by being socially responsible and offering the best
volunteering programs.
• Support poverty alleviation programmes that are offered by the government.
• Donate money/food parcels to local NGO’s.
• NOTE: Some strategies to deal with unemployment can also be used to deal with
poverty.

Ways in which businesses could contribute to the wellbeing of their

employees
• Pay fair wages/salaries to the workers based on the nature of their work/the
prevailing economic conditions in the market.
• Working conditions should include safety/medical/canteen facilities/benefits
like housing/leave/retirement.
• Provide for employees' participation in decision making that affects them.
• Provide employees with recreational facilities to socialise and strengthen work
relations.
• Offer annual physical/medical assessments to workers to promote health
awareness.
• Encourage employees to stay fit and healthy by getting them involved in
health activities to minimize stress/substance abuse/obesity.
• Make trauma debriefing/counselling/therapy available to any employee who
requires these services.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

• Offer financial assistance in the case of any hardship caused by unexpected

medical costs.
• Allow flexible working hours to enhance productivity.
• Offer support programmes for employees infected and affected by HIV/Aids.
• Make childcare facilities available on the premises for working mothers in the
business.
• Start a nutritional programme so that employees can enjoy one meal per day
to keep them in a healthy condition.
• Give time to staff to get involved in projects they choose /Allow staff to use
some of the working hours to participate in the projects of their choice.
• Establish coaching and mentoring programmes for junior employees.
• Conduct team-building sessions to improve employees' morale.
• Encourage employees to attend capacity-building workshops/training
programmes/staff-development programmes/team-development programmes.

Contribution of time and effort improving the wellbeing of the community

• Business should improve the general quality of life of their community, e.g.
invest in education, etc.
• Ensure that the product they supply do not harm consumers/the environment.
• Refrain from engaging in illegal/harmful practices such as employing children
under the legal age/selling illegal substances, etc.
• Make ethically correct business decisions, e.g. not engage in unfair/misleading
advertising, etc.
• Donate money to a community project/run a project to uplift the community.
• Provide recreational/sport facilities to promote social cohesion/healthy activities.

COOPERATE SOCIAL RESPONSIBILITY/CSR

Meaning of CSR
• The continuing commitment by business to behave ethically and contribute to
economic development while improving the quality of life of the local community
and society at large.
• Corporate Social Responsibility/CSR is the way a business conducts its
operations ethically and morally, regarding the use of human, physical and
financial resources.
• Corporate Social Responsibility is an obligation required by law and benefits both
business and society.

Purpose of CSR
• CSR programmes are internal programmes that businesses use to comply with
laws and ethics.
• Key areas of concern are protecting the environment, the wellbeing of employees
from the community and civil society in general.
• Businesses seek to promote public interest and do away with harmful practices
without the need for any formal legislation.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

• Business operations address Triple bottom line through CSR programmes by

considering its impact on people, profit and planet.
• CSR aims at creating a safe working environment for employees.
• CSR programmes and activities the business undertakes to contribute positively
to the community in which the business operates.
• CSR may take the form of a monetary donation to support local organisations

Components of Corporate Social Responsibility (CSR)

• Environment
• Ethical corporate social investment
• Health and safety
• Corporate governance
• Business ethics
• Employment equity
• Supply chain/Distribution channel
• Customers
• Community

Impact of CSR/CSI on businesses

Advantages/Positives of CSR/CSI on businesses
• May attract experienced employees/increase the pool of skilled labour which could
increase productivity.
• Positive/Improved image as the business looks after employees and conducts
itself in a responsible way.
• A business may have a competitive advantage, resulting in good publicity/an
improved reputation.
• Promotes customer loyalty resulting in more sales.
• CSI projects may be used as a marketing strategy to promote their products.
• The business enjoys the goodwill/support of communities.
• CSR projects promote teamwork within businesses.
• CSR helps to attract investors because of increased profits/income.
• Gives businesses tax advantages such as tax reduction/-rebates.
• Assists in solving socio-economic issues like poverty/unemployment, etc.
• The government is less likely to enforce issues through legislation to
businesses that voluntarily participate in CSI projects.
• Employees feel as if they are making a difference in working for the business.
• It helps to retain staff/lower staff turnover as employees' health and safety are
considered.
• Improves the health of its employees through focused CSI projects.
• Businesses become more community-based by working closely with the
community to roll out skills development projects.

AND/OR
Negatives/Disadvantages
• Business may not be supported/Customers may not buy their products/services
resulting in a decrease in sales.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

• Small and medium enterprises find it difficult to implement CSI programmes.

• Detailed reports must be drawn up, which can be time consuming.
• Social spending reduces business/economic efficiency which makes it less
competitive.
• Social involvement is funded from business profits which could have been used to
the benefit of customers/reduce prices.
• CSI activities distract business focus from its core business functions.
• Businesses find it difficult to adhere to legislation governing CSI.
• It can increase financial risk, as programmes cost money and may impact
negatively on profits.
• It is difficult to accurately measure the effectiveness of social investment.
• It is not easy to determine the exact needs of the communities, which may result
in fruitless expenditure on CSI.
• Most managers are not trained/lack experience to handle social programmes.
• Employees may spend more time working on CSI projects instead of focusing on
their core duties.
• Providing goods/services that meet the needs of consumers is, according to some
stakeholders, already socially responsible.
• Shareholders may receive less dividends, as some profits are spent on CSI.
• Some shareholders/stakeholders might withdraw their support from the business
as they feel that social issues should be the government's responsibility.
• NOTE: That the impact of CSR and CSI on business are the same

Impact of CSR/CSI on communities

Positives/Advantages

• Community skills can be improved through the provision of bursaries.

• Better educational facilities are established in poor communities.
• The standard of living of the community is uplifted. /Quality of life of communities
is improved.
• Investing in the medical infrastructure will improve the health of communities.
• Socio-economic issues are attended to/addressed which will improve the welfare
of the community.
• Training opportunities in the community increase the possibility of appointments
of members of the community.
• Implementing developmental programmes in the community improves
entrepreneurial skills of communities.

AND/OR

Negatives/Disadvantages

• Businesses are not always equipped to address social problems.

• Communities tend to be dependent on CSR programmes and struggle to take
their own initiatives.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

• Communities may not sustain infrastructure provided through CSR projects due
to a lack of financial resources.
• Distribution of scarce resources to selected beneficiaries in the community may
cause problems such as discrimination.
• Some businesses only participate in CSR initiatives to raise profit and do not
really care for the community in which they operate.
• Businesses cannot meet the longer-term needs of the society. /Businesses
cannot deliver sustainable CSR programmes.
• The benefits of the programmes may not filter to the intended persons within the
community.
• Spending money on CSR programmes means the business has to recover
expenses through higher prices which have a negative impact on the economy.
• Businesses tend to focus on CSR projects that do not directly benefit the
community.
• Consumers are not easily convinced that the business is acting in the best
interest of the community/environment.
• Less money is available for community projects during unfavourable economic
conditions. √
NOTE: That the impact of CSR and CSI on the community are the same

COOPERATE SOCIAL INVESTMENT /CSI

The meaning of CSI
• Refers to investment of corporate funds/other assets for the primary purpose of
achieving social outcomes
• Money that a business budgets to provide solutions to social problems within the
communities from which they draw their workers or where they make/sell their
products/services.
• Projects that are not part of the normal business activities of a business and are
designed and aim to benefit the community.
• The projects are not directly for purposes of increasing company profits.
• These projects have a strong developmental approach and utilise company
resources to benefit and uplift communities.

Purpose of CSI
• CSI aims at contributing towards sustainable development√ of its immediate
communities.
• CSI is enforceable by law and government requires business to make CSI
contributions.
• CSI projects play a positive role in the development of communities.
• CSI reveals a business’s attitude towards the community in which it operates.
• CSI projects are long-term investment
• It is relevant to the South African context where socio-economic upliftment is such
a priority.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

CSI focus areas

• Community
• Rural development
• Employees
• Environment

Examples of CSI projects

• Donation to support local organisations
• Being involved in conversation projects
• Delivering services that government is unable/slow to deliver/ Building
infrastructure
• Investing in job creation projects
• Providing adult basic education
• Teaching entrepreneurial skills
• Sponsoring arts and culture programmes
• Establishing programmes to promote early childhood development

Other examples of CSI projects from the scenario

JOE TRADING ENTERPRISE (JTE)

Joe Trading Enterprise is making large profits due the excellent service and
quality of products offered to customers. The management of JTE has decided to
invest some of the business profit in the community they operate in by doing the
following:
• Buy school uniforms for needy learners
• Offer HIV/ AIDS prevention programmes
• Offer food parcels to alleviate poverty
• Donate money to social events that benefit the community directly.
• Fund additional lessons, for example Mathematics and Science

Identification of examples CSI projects from the scenario

• School uniforms for needy learners
• HIV/ AIDS prevention programmes
• Food parcels to alleviate poverty
• Donating money to social events that benefit the community directly.
• Funding of additional lessons, for example Mathematics and Science

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

Differences between Corporate Social Responsibility (CSR) and Corporate

Social Investment (CSI)
Corporate Social Responsibility (CSR) Corporate Social Investment (CSI)

- The intention is to change business - Actively committing money and

practices. resources to uplift the community.

- Focus is on increasing image and - Focus is on the upliftment of

profits. community without return on
investment.

- Ensure that all internal CSI policies/ - Ensure that CSI projects are relevant
practices include stakeholders' to the needs of communities.
interests/environmental issues.

- Often intended as a marketing - Intended to benefit and uplift

initiative. communities through social
development.

- Projects are usually linked to the - Projects are external to the business
business, e.g. a manufacturing and have a strong developmental
business offering to train the approach.
unemployed.

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 BUSINESS STUDIES GR 12 REVISED NOTES 2024

BUSINESS VENTURES PAPER 2

CHAPTER 15: PRESENTATION AND DATA RESPONSE

EXAMINATION GUIDELINES

PRESENTATION
• Outline/Explain/Discuss factors that must be considered when preparing for a
presentation. (Before the presentation)
• Outline/Explain factors that must be considered by the presenter while presenting,
e.g. maintain eye contact/use visual aids effectively/move/do not speak fast/use
pauses effectively, etc. (During the presentation)
• Identify factors that must be considered when preparing for a presentation and
during the presentation from given scenarios/case studies.
• Explain how to respond to questions about work and presentations/handle
feedback after a presentation in a non-aggressive and professional manner. (After
the presentation)
• Explain/Suggest/Recommend areas of improvement in the next presentation.

DATA RESPONSE
• Discuss/Explain how to design a multimedia presentation, e.g. start with the
text/content, select the background and /choose relevant images/create graphs.
• Give examples of non-verbal presentations, e.g. written reports, scenarios, types
of graphs (e.g. line, pie and bar charts) as well as other non-verbal types of
information such as pictures and photographs.
• Explain/Discuss /Evaluate the impact (positives/advantages and/or negatives/
disadvantages) of each visual aid.
• Analyse the effectiveness (positives/advantages and/or negatives/disadvantages)
of EACH visual aid.
• Identify visual aids from given scenarios/ statements

Terms and definitions

Term Definition

Presentation The act of communicating information/data to an

Data Response audience/stakeholders
Interpretation in anoforganisation.
and analysis information provided.
Feedback Information about a presentation by an audience which is used as a
Non-verbal basis for improvement.
Presentation of information to an audience without using spoken
presentation
Visual aids words. to charts/pictures/images that help to clarify a point/enhance
Refers
Tables a
A presentation.
set of facts/figures systematically displayed, especially in columns.

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 BUSINESS STUDIES GR 12 REVISED NOTES 2024

Graphs Two-dimensional drawing showing a relationship between two set of

Diagrams variables
A drawingby means the
showing of aappearance/structure/workings
line/curve/bars. of data in a
schematic representation.
Flipchart A large pad of paper, bound so that each page can be turned over at
the top to reveal the next page, used on a stand.
Hand-outs Printed information provided to the audience to accompany a
presentation.

INTRODUCTION
Presentation of data and business-related information forms a critical part of the work
of managers and supervisors in any business. Conveying business related information
to other stakeholders in the business allows them to make informed decisions.

Factors to be considered when preparing for a presentation

• Clear purpose/intentions/objectives and main points of the presentation.
• Main aims captured in the introduction/opening statement of the presentation.
• Information presented should be relevant and accurate.
• Fully conversant with the content/objectives of the presentation.
• Background/diversity/size/pre-knowledge of the audience to determine the
appropriate visual aids.
• Prepare a rough draft of the presentation with a logical structure/format with an
introduction, body and conclusion.
• The conclusion must summarise the key facts and how it relates to the
objectives/shows that all aspects have been addressed.
• Create visual aids/graphics that will consolidate the information/facts to be
conveyed to the board of directors.
• Find out about the venue for the presentation, e.g. what equipment is available/
appropriate/availability of generators as backup to load shedding.
• Consider the time frame for presentation, e.g. fifteen minutes allowed.
• Rehearse to ensure a confident presentation/effective use of time management.
• Prepare for the feedback session, by anticipating possible questions/ comments.

Factors to considered by the presenter while presenting

• Establish credibility by introducing yourself as the presenter at the start.
• Mention/Show most important information first.
• Make the purpose/main points of the presentation clear at the start of the
presentation.
• Use suitable section titles/headings/sub-headings/bullets.
• Summarise the main points of the presentation to conclude the presentation.
• Stand in a good position/upright, where the audience can clearly see the
presenter/presentation.
• Avoid hiding behind equipment.
• Do not ramble on at the start, to avoid losing the audience/their interest.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

• Capture listeners' attention/Involve the audience with a variety of methods, e.g.

short video clips/sound effects/humour, etc.
• Maintain eye contact with the audience.
• Be audible to all listeners/audience.
• Vary the tone of voice/tempo within certain sections to prevent monotony.
• Make the presentation interesting with visual aids/anecdotes/examples/Use
visual aids effectively.
• Use appropriate gestures, e.g. use hands to emphasize points.
• Speak with energy and enthusiasm.
• Pace yourself/Do not rush or talk too slowly.
• Keep the presentation short and simple.
• Conclude/End with a strong/striking ending that will be remembered.
• Ensure that the audience will leave with/take away specific information/benefits.
• Include a statement/quote that will allow a professional/striking ending.
• Manage time effectively to allow time for questions.

Ways in which the presenter can handle feedback/questions in a non-

aggressive and professional manner
• The presenter should stand throughout the feedback session.
• Be polite/confident/courteous when responding to questions.
• Ensure that each question/comment is clearly understood before responding/re-
phrase questions if uncertain.
• He should first listen and then respond.
• Provide feedback as soon as possible after the question was asked or after the
session.
• Be direct/honest/sincere when responding to questions.
• Use simple language to support the examples used in the presentation.
• Keep answers short and to the point.
• Apologise/acknowledge his errors/mistakes if pointed out by the audience.
• Encourage questions from the audience/investors.
• Always address the questions and not the person.
• Acknowledge good questions to motivate audience to ask more questions.
• The presenter should not involve himself in a debate when responding to
questions.
• The presenter should not avoid the questions if he/she does not know the
answer, but rather promise feedback on it.
• Address the full audience/investors and not only the person who posed the
question.

Areas of improvement in the next presentation

• The presenter should revise objectives that were not achieved.
• Use humour appropriately.
• Always be prepared to update/keep the information relevant.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

• Reflect on any problem/criticism and avoid it in future presentations.

• Any information that the presenter receives as feedback from a presentation
should be analysed and where relevant, incorporated/used to update/amend his
presentation.
• Reflect on the time/length of the presentation to add/remove content.
• Increase/Decrease the use of visual aids or replace/remove aids that do not
work well.
• Reflect on the logical flow of the format/slides/application of visual aids.

DATA RESPONSE
Aspects to be considered when designing a multimedia presentation
• Start with the text which forms the basis of the presentation.
• Select the background to complement/enhance the text.
• Choose images that may help to communicate the message.
• Include/Create graphics to assist the information which is conveyed.
• Add special effects/sound/pictures/animation to make it interesting for the
audience.
• Create hyperlinks to allow quick access to other files/documents/video clips.
• Use legible font and font size so that it is easy to see/read.
• Keep slides/images/graphs/font simple by not mixing different styles/colours.
• Make sure there are no language/spelling errors.
• Use bright colours to increase visibility.
• Structure information in a logical sequence so that the audience can easily
follow the content of the presentation.
• Limit the information on each slide by using key words and not full sentences

Examples of non-verbal presentation methods

• Tables
• Graphs/bar graph/line graph/histogram/pie graph
• Diagrams
• Illustrations/Pictures/Photographs/Scenarios
• Written/Business reports
• Flip charts
• Handouts
• Slide shows

IMPACT OF VISUAL AIDS

Impact of data projector/PowerPoint
Positives/Advantages
• Graphic programmes have the capacity to convey ideas and support what the
presenter says.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

• Easy to combine with sound/video clips.

• Simple/Less cluttered slides may capture the interest of the audience.
• Video clips can provide variety and capture the attention of the audience.
• Variation of colour/background/sound immediately captures the attention of the
audience and retain their interest throughout the presentation.
• Slides should only be used where they can enhance the facts or summarise
information.
AND/OR

Negatives/Disadvantages
• Unprofessional handling of the data projector/PowerPoint presentation material.
• May lead to irritation/may result in the audience losing interest.
• Less effective to people with visual impairments.
• Simply reading off the slides makes a presentation boring/meaningless.
• Unable to show slides without electricity/data projector.

Impact of Overhead projectors/transparencies

Positives/Advantages
• Summaries/Simple graphics/Diagrams/Processes may be explained easily on
transparencies.
• It can be prepared manually (OHP pens) or electronically on computer/copier.
• A useful replacement/back-up if computer/electronic equipment fail or are not
available.
• Effective transparencies/projections should be clear and visible, e.g. large print,
few words/lines.
• Effective transparencies/projections should be clear and visible, e.g. large print,
few words/lines.
• OHP transparencies can be used to reflect colour images.
• It may be an effective/useful reminder to the presenter of all the points to be
covered.
AND/OR
Negatives/Disadvantages
• Transparencies that are not well ordered/ organised, may convey an
unprofessional image.
• It can be easily replaced by a PowerPoint presentation.
• Not easy to combine with sound/audio.
• Used most effectively when lights are dimmed/switched off which make it difficult
for the audience to make their own notes.

Impact of hand-outs
Positives/Advantages
• Meaningful hand-outs may be handed out at the start of the presentation to
attract attention/encourage participation.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

• Notes/Hard copies of the slide presentation can be distributed at the end of the
presentation as a reminder of the key facts of the presentation.
• It is easy to update handouts with recent information/developments.
• Notes may be compared with electronic slides /PowerPoint to validate/compare
the accuracy of the information.
• Extra information such as contact details/price lists may be handed out to
promote the services of the business.
• Useful information for improving the next presentation may be obtained when the
audience completes feedback questionnaires after the presentation.

AND/OR
Negatives/Disadvantages
• Handing out material at the start of the presentation may distract/lose audience
attention.
• As it only summarises key information, some details might be lost/omitted.
• Printed material is expensive, and it is easy to lose hard copies.
• Increases the risk of unauthorised duplication and the use of confidential
information.
• Handouts cannot be combined with audio material; it only focuses on the visual
aspects of the support material.

Impact of flip charts

Positives/Advantages
• Mainly used for a small audience to note down short notes/emphasise
concepts/ideas.
• Presenters can prepare sets of pages in advance to save time during the
presentation.
• Very effective in brainstorming sessions as suggestions are summarised or
listed.
• In a sales pitch it may be useful during the feedback session to summarise main
facts/aspects that the presenter needs to follow up.
• Presenters can record a summary of responses received from the
stakeholders/audience.

AND/OR

Negatives/Disadvantages
• There may not be enough time during the presentation to make written notes, so
some ideas may not be listed.
• Handwriting may be illegible/untidy which may not contribute to a professional
image/presentation.
• It may not always be possible to prepare flip charts before the presentation, so it
can become cluttered/chaotic.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

• A flip chart that is used during a presentation is often not well written and may
confuse the stakeholders/audience.

Impact of Interactive whiteboard/Smart boards

Positives/Advantages
• Images can be projected directly from a computer, so no external
projector/devices necessary.
• Special pens allow the presenter to write on the board while prepared images
are displayed.
• Additional notes that were added during the presentation can be captured on
computer after the presentation.
• It can be controlled by the touch of a finger, so the presenter can move away
from the computer during the presentation computer during the presentation.
• Easy to combine with sound/other visual aids.
• Useful to capture feedback and new ideas.

AND/OR

Negatives/Disadvantages
• Should only be used by a presenter who knows the unique features of the
interactive whiteboard/who can use it to its full potential.
• Cannot be connected to any computer as special, licensed software is needed to
be able to use it.
• Technical challenges may render it ineffective, e.g. loss of signal while using it.

Impact of posters/signs/banners/portable advertising stands/flags

Positives/Advantages
• It should be colourful/eye-catching/creative to support the core message of the
presentation.
• May contain large illustrations/pictures/features of the products/key concepts to
emphasise detail, e.g. creative jewellery/unique features of the jewellery.
• Can make impact when placed strategically in/outside the venue.
• Useful in promoting the logo/vision of the business.

AND/OR

Negatives/Disadvantages
• May overpower/draw attention away from the presentation if it is too big/not
placed correctly.
• May not always be useful in a small venue/audience as it can create a 'crowded'
atmosphere.
• Only focuses on visual aspects as it cannot always be combined with
sound/audio.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

BUSINESS VENTURES PAPER 2

CHAPTER 15: FORMS OF OWNERSHIP

EXAMINATION GUIDELINES

Learners should be able to:

• Explain the meaning of limited liability and unlimited liability.

• Explain/Discuss the characteristics of each form of ownership.
• Recap: Discuss/Explain/Evaluate the impact (positives/advantages and/or
negatives/disadvantages) of the different forms of ownership.
• Explain/Discuss how the following criteria could contribute to the success and/or
failure of each form of ownership:
o Taxation: The tax requirements of each form of ownership determine the
impact of taxation on business success/failure.
o Management: Ownership impacts on management functions which determine
the success/failure of the business.
o Capital: refers to the ability to obtain capital from various sources (e.g.,
own/borrowed capital). The amount of capital that can be sourced will also
impact on business success/failure.
o Division of profits: refers to how profit is divided between
owner(s)/shareholders/ investors.
o Legislation/Legal requirements: for establishment/starting a business
impact on the establishment costs and time before a business can legally do
business.

TERMS AND DEFINITIONS

Term Definition
Form of ownership The legal position of the business and the way it is
owned.
Continuity Continue to exist even if a change of ownership takes
place, e.g. a member or shareholder dies or retires.
Surety If a person or business accepts liability for the debt of
another person or business.
Securities Shares and bonds issued by a company.
Limited liability Loses are limited to the amount that the owner invested in
the business.
Unlimited liability The owner’s personal assets may be seized to pay for the
debts of the business.
Memorandum of The document that sets out the rights, responsibilities and
Incorporation (MOI) duties of shareholders and directors (serves as a

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

constitution of a company).
Sole Trader /Sole A business is owned and controlled by one person who takes all
proprietor the decisions, responsibility and profits from the business they
run.
Partnership An agreement between two or more parties that have agreed to
finance and work together in the pursuit of common business
goals.
Co-operative society Autonomous association of persons united voluntarily to meet
their common economic/ social needs/aspirations through a
jointly owned and democratically controlled enterprise.
Company A company is a legal person who has capacity and powers to act
on its own.
Profit Companies A company incorporated for the purpose of financial gain for its
shareholders.
Non-profit company A non-profit company is an association incorporated not for gain.
Public company A public company is a voluntary association of ONE or more
persons, governed by the company Act 71 of 2008, incorporated
in terms of the Memorandum of Incorporation.
Private company A private company is a voluntary association of 1 or more
persons.
Personal liability A personal liability company is a voluntary association of 1 or
company more person.
State-Owned A state-owned company (SOC) is a legal entity that is
company created by the government to participate in commercial
activities on its behalf.
Partnership A document that contains exhaustive provisions with
Article regards to the matters concerning the business and the
partners.
Prospectus Prospectus is a document inviting the public to buy
securities/shares.
Annual General A meeting held once a year where the shareholders receive
Meeting (AGM) a report stating how well the company has done.
Directors People elected to the board of a company by the
shareholders to represent the shareholders’ interests.

INTRODUCTION
One of the first and most important decisions a business owner makes is choosing the
best suitable form of ownership under which he or she will operate. Each form of
ownership has its own advantages, disadvantages, risks, and rewards that can affect
the business’s opportunity for long-term success. Entrepreneurs must consider
various factors that may contribute to the success and/or failure of a business.
Sometimes businesses may need to change their form of ownership as they develop
and expand over time.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

Meaning of limited and unlimited liability

• Limited liability – Losses are limited to the amount that the owner invested in the
business.
• Unlimited liability – The owner’s personal assets maybe seized to pay for the debts
of the business.

Differences between limited and unlimited liability

LIMITED LIABILITY UNLIMITED LIABILITY
• Losses are limited to the amount that the • The liability of the owners to pay debts/
owner invested in the business. claims is not limited to the business
only.
• The owner’s personal assets are • The owner’s personal assets may be
protected against the debts of the seized to pay for the debts of the
business. business.
• Applicable to forms of ownership/ • Applicable to a sole trader and
companies that have a separate legal partnership as they do not have a
entity/personality. separate legal entity/personality

DIFFERENT FORMS OF OWNERSHIP

Characteristics and impact of each form of ownership

Sole proprietor
Definition
• A sole trader is a business that is owned and managed by one person.

Characteristics of a sole proprietor

• The owner has a personal interest in the management and the services that is
rendered.
• It is easy to establish as there are no legal formalities in forming the business.
• The necessary capital to run the business is provided by the sole owner/The
owner may borrow from other sources including financial institutions as need
arises
• There are no legal requirements regarding the name of the business.
• The owner has unlimited liability/The owner is personally liable for the debt of
the business.
• A sole trader has limited company for expansion and lacks continuity of
existence.
• The business has no legal personality and therefore has no continuity/
Continuity depends on the life and health of the owner.
• The sole proprietor does not pay tax owners pay personal income tax on private
capacity.

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BUSINESS STUDIES GR 12 REVISED NOTES 2024

Impact of a sole trader

ADVANTAGES DISADVANTAGES
• Owner makes all decisions. • Unlimited liability which means the
owner is responsible for all debts
incurred.
• Requires little capital to start. • Cash flow is often a problem.
• The owner takes all the profits • Growth of business can be restricted
made by the business and due to lack of capital.
entitled to the ownership of
assets.
• Simple management structure. • Not a legal entity and no continuity
• Can easily adapt to the needs of • Difficult to attract highly skilled and
the client/customer. knowledgeable employees.
• No legal process and • The owner is responsible for providing
requirements. all the capital needed.
• The assets of the business • If the owner does not have enough
belong to the owner. knowledge/experience the business may
fail.
• There is personal
encouragement and personal
contact between the owner and
customers.
• It is managed by the owner
assisted by some paid workers
in some instances/The ultimate
control of the business rests with
the owner.

Factors that contribute to the success and/or failure of a sole trader

Factor Success AND/OR Failure
Management • Managed/Controlled by • Lack of adequate business
the owner who has a management
direct interest in the skills/knowledge may lead to
success of the business. business failure.
• Urgent decisions are • Poor decision making by the
taken on opportunities owner can impact negatively
that can lead to business on profitability.
growth.
Taxation • Owner only taxed on • If profits get too big may end
profits in personal up paying high tax in
capacity. personal capacity.
• Depending on how much • Failure by the owner to
income the owner earns, comply with personal income
his/her tax rate may be tax regulations could lead to
lower than the company substantial financial penalties
tax rate. imposed by SARS.

34
BUSINESS STUDIES GR 12 REVISED NOTES 2024

• If the owner earns below

a certain threshold
amount per year, no
income tax is payable,
and the business’s profits
are thus not taxed.
Capital • Capital can be carefully • Profits may not be large
spent and managed enough for expansion.
• The owner may be able • Cannot appoint people with
to borrow money from a large salaries
financial institution, • Owner responsible for any
especially if he/she has capital borrowed.
assets that can be used
as surety for a loan.
Division of • Owner receives all profits • Owner needs to budget
profits from the business which carefully so that business
can lead to capital debts are covered.
growth. • If the owner does not make a
• The owner may use profit profit, the income and
to expand the business. livelihood of the owner may
be severely affected.
• The owner is personally liable
for the loss of the business.
• Profits may not cover all
business debts/Owner may
decide not to expand.
Legislation/legal • It is easy/inexpensive to • Unlimited liability may
requirements start. discourage owners if the
• Unlimited liability may business struggled to pay off
encourage the owner to its debts.
work harder to ensure • Personal debts and business
the success of the debts are not separated.
business. • Must comply with relevant
• There are limited municipal regulations or it
regulatory requirements could close down.
regarding the name of • The owner is personally liable
the business. for the business debt; he/she
• It is not compulsory to may be reluctant to take
have financial statements • Business may only qualify for
audited. more loans if they are
licenced/Loans are not easily
obtainable.

Partnership
Definition
A partnership is an agreement between two or more parties that have agreed to finance and
work together in the pursuit of common business goals. All partners bear equal responsibility
for debts incurred.

35
BUSINESS STUDIES GR 12 REVISED NOTES 2024

Characteristics of a partnership
• An agreement between two or more people who combine labour, capital and
resources towards a common goal.
• Partners combine capital and may also borrow capital from financial institutions.
• No legal requirements regarding the name of the business.
• Partners have unlimited liability and are jointly and severally liable for the debts
of the business.
• Profit is shared according to the partnership agreement.
• Partnership does not pay tax partners pay personal income tax.
• Auditing of financial statements is optional.
• Partners share responsibilities and they are all involved in decision making.
• No legal formalities to start, only a written partnership agreement is required.
• The partnership does not pay income tax, only the partners in their personal
capacities.
• Diversity, specialisation and different skills of the partners can be used to
manage the business.
• Partnership has no legal personality and therefore has no continuity.
• Partners share responsibilities and they are all involved in decision making.

Impact of a partnership

ADVANTAGES DISADVANTAGES
• The partners able to put their • A partnership has unlimited liability
knowledge and skills together to
collectively make the best
decisions.
• The workload and responsibility is • Each business partner is legally
shared between partners. responsible for the joint liability of the
partnership.
• Partners are able to share • Different personalities and options of
resources. partners can lead to conflict it
disagreements.
• Partners are only required to pay • Partners might not all contribute
tax in their personal and individual equally.
capacity.
• The partners have a personal • Loss in profits and stability of the
interest in the management of the business can occur if a partner
business. resigns/ dies/loses interest in the
business or is declared bankrupt.
• Can bring in extra partners at any • There can be lack of capital and cash
time. flow.
• Attract prospective employees with
the option or incentives of
becoming a partner.

36
BUSINESS STUDIES GR 12 REVISED NOTES 2024

Factors that contribute to the success and/or failure of a partnership

Factor Success AND/OR Failure
Management • Partners are actively • Decision making can be
involved in management and time- consuming as all
may use the ideas of other partners have to be in
partners. agreement
• Not all partners need to be • Some management tasks
actively involved in may be neglected, as one
management and would partner may leave it to
rather appoint competent others to complete
managers. • Partners may disagree on
• Partners have access to how to run the business,
expertise of other partners which may lead to tension
when difficult decisions have between them
to be made. • Partners are agents of the
partnership and bad
management decisions
may be forced onto other
partners.
• Different
personalities/opinions could
lead to conflict/
disagreements.
Taxation • Partnerships pay VAT only • High-earning partners pay
on relevant products more tax, which may
sold/services rendered discourage other partners
which reduces tax from joining the partnership.
administration • Partners may withdraw
• The partnership does not more cash to reduce their
pay income tax, only the tax burden which may
partners in their personal cause cash flow problems
capacities for the partnership
Capital • Capital can be carefully • Partners may not all have
spent and managed. capital to put into business
• More than one partner when needed.
contributing to capital. • Unequal inputs as some
partners put in expertise
instead of cash.
Division of • Partners share profits • Amount of work done may
profits according to their not be equal to the amount
contributions. of profit that each partner
receives.
Legislation • Easy and cheap to establish, • Unlimited liability/ partners
as partners must draw up are jointly and severally
partnership agreement. liable for the debts of the
• Partners are more motivated business.
to make a success because • If one partner dies or
retires, the remaining

37
BUSINESS STUDIES GR 12 REVISED NOTES 2024

of their personal partners need to draw up a

possessions are at risk. new agreement.
• No regulatory requirements • Oral agreements between
regarding the name of the partners can cause conflict
business. between partners.
• Only subjected to the • A partnership is not a legal
provisions of the Income Tax entity and cannot sue or be
Act as compared to sued.
companies.

Private company
Definition
It can be a small or large company and has one or more directors. It is a form of
ownership that is owned by individuals or a small group of shareholders and is not
publicly traded on a stock exchange

Characteristics of a private company

• Requires one or more directors and one or more shareholders.
• It needs a minimum of one shareholder and there is no limit on the number of
shareholders that a private company may have.
• Register with the registrar of companies by drawing up Memorandum of
Incorporation.
• The company name ends with letters (PTY) Ltd.
• A private company is not allowed to sell shares to the public.
• Investors put capital in to earn profit from shares.
• The company has a legal personality as well as unlimited continuity.
• The auditing of financial statements is optional.
• Profits are shared in the form of dividends in proportion to the share held.
• Shareholders have a limited liability and will not lose their initial capital invested
if the business goes bankrupt.
• Shareholders have limited liability and a separate legal entity.
• Raises capital by issuing shares to its shareholders.
• Profits are shared in the form of dividends in proportion to the number of shares
held.

Impact of a private company

ADVANTAGES DISADVANTAGES
• More opportunities to pay less • Requires a lot of capital.
taxation.
• Good long-term growth • The more shareholders, the less
opportunities. profits.
• Own legal identity and • More taxation requirements.
shareholders have no direct legal
implications/ limited liability.

38
BUSINESS STUDIES GR 12 REVISED NOTES 2024

• Board of directors with • Directors do not have a personal

expertise/experience can be interest
appointed to take decisions
• Not required to file annual • Annual financial statements must be
financial statements with the reviewed by a qualified person, which
commission. is an extra expense to the company.
• It is a legal person and can sign • Difficult and expensive to establish as
contracts in its own name. the company is subjected to many
legal requirements.
• The new Act forces personal • Pays tax on the profits of the business
liability on directors who and on declared dividends/Subject to
knowingly participated in carrying double taxation.
out business in a
reckless/fraudulent manner.
• Financial statements are private • Must prepare annual financial
and not available to the public. statements.
• A company has continuity of
existence.
• It is possible to sell a private
company as it is a legal entity.
• It can easy raise capital by issuing
shares to its members.

Factors that contribute to the success and/or failure of a private company

Factor Success AND/OR Failure
Management • Managed at least by • Directors may not have a
one competent highly direct interest in the
skilled director. company, which can
• The management of hamper growth and profit
the company can maximization.
improve since directors • Directors' fees increase the
are accountable to company's expenses which
shareholders. reduces net profit.
• Shareholders can vote • Some shareholders may
for/appoint the most not exercise their voting
capable directors to rights resulting in choosing
manage their company the wrong person as a
director.
• Large management
structures can result in
decision-making taking
time.
• Directors may not be
motivated to work very hard
because shareholders
decide on the directors'
remuneration.

39
BUSINESS STUDIES GR 12 REVISED NOTES 2024

Taxation • Can obtain tax rebates • Subject to double taxation

if they are involved in e.g. shareholders pay
SCI projects. secondary tax this can have
• Can obtain government a negative impact to a
tenders and renew their company that is already
licenses if they do not financially struggling.
evade tax.
Capital • Large amount of capital • It cannot grow into a very
can be raised since large business since it
there is no limit on the cannot invite the public to
number of buy shares.
shareholders. • Restrictions on
• The company can transferability of shares
access long term may not attract financially
capital and therefore strong investors.
has good long term • Large amount of capital
growth opportunities. cannot be obtained as
• Even though shares capital contribution is only
are not freely limited to private
transferable, large shareholders.
private companies can
raise considerable
amount of capital. More
capital can be raised by
issuing shares to
shareholders.
Division of profits • High profits and good • Shareholders may sell their
returns to shareholders shares when dividends are
indicate the success of low, resulting in a drop in
a company, which share prices
increases the value of • Dividends are not always
shares paid out which may
• Profits generated can discourage new investors.
be re-invested to
expand business
operations
• Shareholders receive
profits according to the
type and number of
their shares.
Legislation • Procedures to form a • Formation procedures are
private company have time
been simplified by the consuming/complicated/
new Companies Act 71 expensive, as many legal
of 2008 documents need to be
• Limited liability allows prepared/submitted
for greater risk taking, • High
which may lead to formation/establishment
growth of the business

40
BUSINESS STUDIES GR 12 REVISED NOTES 2024

• Auditing of financial expenses require large

statements (if required), start-up capital.
gives shareholders the • Annual audit of financial
assurance that the statements (if required) is
business is being costly
properly managed and • If a private company does
supports raising not comply with legislation,
additional finance its licence maybe withdrawn
• There is no longer a by the Companies and
limit on the number of Intellectual Property
shareholders in a Commission (CIPC).
private company.
• A private company can
benefit from
government
programmes if they
comply with the
relevant legislation
• Personal liability of
shareholders does not
affect the company's
assets

Personal Liability Company

Definition
• Very similar to a private company, the difference is that the directors of a
Personal Liability company are jointly and severally liable for all the debts and
liabilities of the company. This means that the directors have unlimited liability.
• The name of the personal liability company ends in INC and the name of the
private company ends in (PTY) Ltd.

Characteristics of a personal liability company

• The company name must end with letters INC
• Directors have unlimited liability, and they are jointly liable for the debts of the
business even if they are long out of office.
• The memorandum of Incorporation should state that it is a personal liability
company.
• They must at least have one director on their board of directors.
NOTE: Other characteristics of a personal liability company are the same as
the private company except the above mentioned two characteristics.

Impact of a personal liability company

Advantages and/or disadvantages
NOTE: 1. The advantages of a personal liability company are the same as the
private company.
2. The disadvantages are also the same as the private company except
the directors of the personal liability company have unlimited liability.

41
BUSINESS STUDIES GR 12 REVISED NOTES 2024

Factors that contribute to the success and/or failure of a personal liability

company
Factor Success AND/OR Failure
Management • PLC is managed by a • Directors may not have a
competent board of direct interest in the
directors who may be company, which can
experts in their fields. hamper growth and profit
• Quick decisions can be maximization
made even if there is • PLC and its shareholders
only one director. are compelled to budget a
• Shareholders can vote larger amount for directors'
for/appoint the most remuneration to attract the
capable directors to best directors.
manage their company. • Directors' fees increase the
company's expenses which
reduces net profit
Taxation • Can obtain tax rebates • Subject to double taxation
if they are involved in e.g. shareholders pay
SCI projects. secondary tax this can
• Can obtain government have a negative impact to
tenders and renew their a company that is already
licenses if they do not financially struggling.
evade tax.
• PLC only pays tax after
business expenses
have been deducted.
• Companies and
shareholders are taxed
separately/double
taxation.
• The company pays tax
at a fixed rate which can
be lower than that of
partnerships.
• Image of the business is
promoted and attracts
investment when
companies comply with
tax regulations/laws.
Capital • Capital can be • It cannot grow into a very
increased by getting large business since it
more shareholders. cannot invite the public to
buy shares.
• Restrictions on
transferability of shares
may not attract financially
strong investors.
• Large amount of capital
cannot be obtained as

42
BUSINESS STUDIES GR 12 REVISED NOTES 2024

capital contribution is only

limited to private
shareholders.
Division of profits • High profits and good • Shareholders may sell their
returns to shareholders shares when dividends are
indicate the success of low, resulting in a drop in
a company, which share prices
increases the value of • Dividends are not always
shares paid out which may
• Profits generated can discourage new investors.
be re-invested to
expand business
operations.
Legislation • The company and its • Lengthy registration
owners (shareholders) requirements may delay
are separate entities, the actual operation of the
which may encourage business and shareholders
more people to join the can loose on profitable
company opportunities
• Directors are forced (by • It is expensive to register
the Act) to act this form of ownership
responsibly and work which increases business
harder towards the expenses hence reducing
success of the company profit
to protect their personal • The drafting of directors'
assets performance contracts may
• Directors sign be time consuming,
performance contracts expensive and increase
which will motivate them costs
to perform • Auditing is required only if
professionally and the PLC meets the
ethically requisite tests for solvency
• Rights and duties of and liquidity, which leads to
shareholders are extra auditing costs.
stipulated in the
Companies Act, which
minimises unethical and
corrupt behaviour
• May obtain government
tenders as the PLC is
properly registered in
compliance with the
Companies Act

Differences between the private and a personal liability company

PRIVATE COMPANY PERSONAL LIABLITY COMPANY
• The name ends with (PTY) Ltd • The name ends with INC
• The directors are not personally • The directors are personally liable for the
liable for the debts of the business. debts of the business.

43
BUSINESS STUDIES GR 12 REVISED NOTES 2024

Public company
Definition
• A public company is a company that is registered to offer its stock and shares to
the public. This is mostly done through the Johannesburg Securities/Stock
Exchange (JSE).
• The public company is designed for a large –scale operation that require large
capital investments.

Characteristics of a public company

• A minimum of one person is required to start a public company.
• Requires three or more directors and three or more shareholders.
• Register with the Registrar of Companies by drawing up Memorandum of
Incorporation.
• The company name ends with letters Ltd.
• Has legal personality and therefore has unlimited continuity
• Raises capital by issuing shares to the public and borrowing capital by issuing a
debenture.
• A prospectus is issued to the public to raise capital.
• Shareholders have a limited liability.
• The new Act forces personal liability on directors who knowingly participated in
carrying out business in a reckless/fraudulent manner.
• The company has a legal personality as well as unlimited continuity.
• A public company is required to hold an AGM (Annual General Meeting).
• Auditing of financial statements us compulsory and audited statements are
available to shareholders and the public.
• Profits are shared in the form of dividends in proportion to the share held.

44
BUSINESS STUDIES GR 12 REVISED NOTES 2024

Impact of a public company

ADVANTAGES DISADVANTAGES
• The business has its own legal • Must disclose all financial information
identity
• Easy to raise funds for growth • Large amount of funds is spent on
through the sale of shares. financial audits.
• Shareholder is only liable for • Stocks must be traded publicly.
the amount which is
invested/Shareholders have
limited liability.
• Can appoint a knowledgeable • A full report must be submitted to the
board of directors. major shareholders each year.
• Buy and sell shares freely. • Difficult and expensive to establish as the
company is subjected to many legal
requirements
• Shareholders can sell/transfer • The more shareholders, the less profit.
their shares freely.
• The public has access to the • Shareholders may be allowed little or no
information, and this could input into the affairs of the company.
motivate them to buy shares
from a company.
• Additional shares can be raised • Due to legislation, decisions take longer
by issuing more shares or and there may be disagreements.
debentures
• Strict regulatory requirements • Financial affairs must be known to
protect shareholders. publicly, this information could be used to
competitors’ advantage.

Factors that contribute to the success and/or failure of a public company

Factor Success AND/OR Failure
Management • Managed at least by • Directors may not have a
one competent highly direct interest in the
skilled director. company, which can
• The management of hamper growth and profit
the company can maximization
improve since directors • Large management
are accountable to structure can result in
shareholders. decision making taking
• Shareholders can vote time.
for/appoint the most • Directors' fees increase the
capable directors to company's expenses
manage their company. which reduces net profit
• Management may open to
legal challenges if their
reports do not comply with
King Code 111.
• Some shareholders may
not exercise their voting

45
BUSINESS STUDIES GR 12 REVISED NOTES 2024

rights resulting in choosing

the wrong person as a
director.
• Directors may not be
motivated to work very
hard because
shareholders decide on the
directors' remuneration
Taxation • Can obtain tax rebates • Subject to double taxation
if they are involved in e.g. shareholders pay
SCI projects. secondary tax this can
• Can obtain government have a negative impact to
tenders and renew their a company that is already
licenses if they do not financially struggling
evade tax.
Capital • Can raise large • Growth is limited if
amounts of capital as sufficient capital cannot be
shares/ debentures can raised.
be sold to the • Large amounts of capital
public/shareholders required to start a public
• Share capital clause in company.
the Memorandum of • Raising extra capital may
Incorporation (MOI) be difficult if the economic
may be changed to climate is
issue more shares unfavourable/Share prices
• A public company’s change all the time and
shares are listed on the they may lose value.
JSE which gives the • An increase in the number
company exposure to of shares issued may lead
more potential to more dividends paid
investors. out/less retained income
from company profits.
Division of profits • High profits and good • Shareholders may sell
returns to shareholders their shares when
indicate the success of dividends are low, resulting
a company, which in a drop in share prices
increases the value of • Dividends are taxable/not
shares always paid out which may
• Profits generated can discourage new investors.
be re-invested to
expand business
operations
• Shareholders receive
profits according to the
type and number of
their shares.
Legislation • The company and its • Formation procedures are
owners (shareholders) time
are separate entities, consuming/complicated/

46
BUSINESS STUDIES GR 12 REVISED NOTES 2024

which may encourage expensive, as many legal

more people to join the documents need to be
company prepared/submitted
• Limited liability allows • High
for greater risk taking, formation/establishment
which may lead to expenses require large
growth of the business start-up capital.
• Auditing of financial • Annual audit of financial
statements, gives statements is costly.
shareholders the • If a public company does
assurance that the not comply with legislation,
business is being its licence maybe
properly managed and withdrawn by the
supports raising Companies and Intellectual
additional finance. Property Commission
(CIPC).

Differences between the private and public company

PRIVATE COMPANY PUBLIC COMPANY
- May no offer shares to the - Trades its shares publicly on the
general public. Johannesburg Securities Exchange.
- Shares are not freely - Shares are freely transferable.
transferable
- Minimum of one director. - Minimum of three directors.

- Name must end with - Name must end with Limited/Ltd.

Proprietary Limited/(Pty) Ltd.
- Annual financial statements - Annual financial statements need to be
need not be audited and audited and published.
published.
- Does not need to publish a - Have to register and publish a
prospectus as it cannot trade prospectus with the Companies and
its shares publicly. Intellectual Property Commission/CIPC.
- The company is not required to - Must raise a minimum subscription prior
raise the minimum to commencement of the company.
subscription/ issue minimum
shares.

State –owned company

Definition
• A state-owned company has the government as its major shareholder and falls
under the department of Public Enterprise.
• These businesses take on the role of commercial enterprise on behalf of the
government.

47
BUSINESS STUDIES GR 12 REVISED NOTES 2024

Characteristics of a State –Owned Company

• Requires three or more directors and one or more shareholders.
• Register with the Registrar of Companies by drawing up Memorandum of
Incorporation.
• It is owned by the government and operated for profit.
• SOC is listed as a public company.
• The name ends with letters SOC.
• State –owned companies support private businesses by providing infrastructure
such as communication service /Post office and supply of electricity/Eskom.

Impact of state-owned companies

ADVANTAGES DISADVANTAGES
• Profits may be used to finance • May result to poor management as
other state departments. government is not always as efficient as
the private sector.
• Offer essential services which • Inefficiency due to the size of the
may not be offered by the private business.
sector.
• Prices are kept • Often rely on government subsidies.
reasonable/Create sound
competition with the private
sector to make services
affordable to more citizens.
• Wasteful duplication of services • A lack of incentive for employees to
is eliminated. perform if there is no absence of other
motivator such as productivity bonuses.
• Planning can be coordinated • Government can lose money through
through central control. the business.
• Generates income to finance • A lack of incentive for employees to
social programmes. perform if there is no share in the profit.
• Jobs are created for all skills • Losses must be met by the taxpayers.
levels.
• Shares are not freely tradable making it
difficult to raise capital.
• SOC must follow strict regulations for
operations to raise capital.
• Financial statements must be audited.

Non-profit companies
Definition
A non-profit company/NPO is not formed with the intention to make a profit, but for public
benefit.

48
BUSINESS STUDIES GR 12 REVISED NOTES 2024

Characteristics of non-profit companies

• The main aim is to provide service and not to make a profit.
• They are funded by donations and foreign funding.
• The name of the company must end in NPC.
• All profits must be used for the primary objective of the non-profit company.
• It must prepare the Memorandum of Incorporation.
• Qualifying NPCs are granted tax-exempt status.

Impact of non-profit companies

ADVANTAGES DISADVANTAGES
• Proceeds/Surplus funds are used • Need professional assistance to set up
solely for the primary objective of this organisation.
the organisation/further goals of
the business.
• They provide social services to • Does not generate enough capital to
various communities. cover their expenses.
• Donors receive tax deductions • Donations may not always be enough.
which motivates them to invest in
a non-profit company.
• The liability of the members is • Assets are not distributed to the
limited which may attract members upon closing.
additional membership.
• Has continuity of existence which • Creating a non-profit company takes
reduces the risk of closure. time/effort/money.
• Most of the income of a non-profit • Obtaining grants can be a slow and
company is free from income tiring process.
taxes.
• Can receive funding/grants/aid to • Incorporators cannot take along the
render their services. assets accumulated by the NPC if they
decide to leave.
• They are not allowed to pay bonuses
to members.

Factors that contribute to the success and/or failure of a non- profit company
Factor Success AND/OR Failure
Management • A NPC may be well • Large management
managed as it requires structure can
a minimum of three complicate/delay decisions.
directors. • Directors may mismanage
• More directors may be business funds as they may
appointed to bring more not have a direct interest in
skills/ideas/ the NPC.
innovations/expertise to • Directors are liable for any
the NPC. loss/ damage/cost
• The legally prescribed sustained by the company.
management structure

49
BUSINESS STUDIES GR 12 REVISED NOTES 2024

ensures a well- • Directors may not have

organised company skills to manage resources.
Taxation • May qualify for tax • Required to pay income tax
exemption if certain if engaged in activities that
criteria are met are unrelated to their
• They may receive business purpose
certain tax • Must meet certain tax
benefits/rebates when requirements to be
actively involved in exempted, e.g. operations
community projects. must be exclusively for
charitable, scientific or
public safety purpose
Capital • Unlimited number of • Founders may contribute
founders may contribute limited capital/may not
more capital to the contribute capital which
company. may not be sufficient for the
• More capital may be establishment/operation of
raised through the company.
donations/ sponsorships • The company
for operation/expansion. depends/relies on
• It is easy to raise donations as their main
funds/capital, as donors source of capital which may
enjoy tax benefits. hamper its
operation/expansion.
• NPC may struggle to raise
enough capital/funds if they
fail to convince
donors/donations are
misused.
Division of profits • The profits of the • May discourage potential
company are used investors from investing in
finance other needs of the company as this is a
the company. non-profit company.
Legislation • The company and its • Formation procedures are
owners (shareholders) time
are separate entities, consuming/complicated/
which may encourage expensive, as many legal
more people to join the documents need to be
company prepared/submitted.
• Financial statements
are audited this may
result to effective use of
resources.

50
BUSINESS STUDIES GR 12 REVISED NOTES 2024

Cooperatives

Definition
A cooperative is a traditional way of a group of interested parties getting together and
sharing resources/infrastructures and costs to achieve a better outcome. It is an
autonomous association of persons united voluntarily to meet their common economic
and social needs and aspirations through a jointly owned and democratically controlled
enterprise organised and operated on co-operative principles.

Characteristics of cooperatives
• Minimum of five members is required to start a cooperative.
• Members contribute capital in the form of entrance fee.
• Register with the Registrar of Companies
• Legal entity and can own land and open bank accounts.
• Members own and run the business together and share equally in its profits.
• Decisions are taken democratically
• They are motivated by service rather than profit
• Must register with the Registrar of Cooperatives Societies
• The word ‘Cooperative Limited’ must appear at the end of its name.
• They are managed by a minimum of three directors.
• The objective of a co-operative is to create mutual benefit for the members.
• Co-operatives pay taxes on income retained for investment and reserves.
Surplus revenues are returned, according to patronage, to individual members
who pay taxes on that income.

Impact of cooperatives
ADVANTAGES DISADVANTAGES
• Access to resources and funding • Decisions are often difficult to reach
and time consuming.
• Decision making is by a group • Difficult to grow a co-operative.
• Each member has an equal share • Very few promotion positions for staff.
in the business.
• A co-operative can appoint its own • It can be difficult to get a loan
management. because their main objective is not
always to make a profit.
• Members have limited liability • The success of cooperatives depends
on the support of the members.
• The decisions are democratic and • Shares are not freely transferable.
fair.
• Members are motivated because • All members have one vote
they are working for themselves. regardless of the number of shares
held.
• Can gain extra capital by asking its
members to buy shares.
• Co-operatives have continuity of
existence

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• Resources of many people are

pooled together to achieve
common objectives
• Profits are shared equally amongst
members.

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