We have defined three commonly confused phrases, so you don’t have to continue to wonder what they mean.
Within any industry there are terms, phrases and acronyms that are bound to trip a few of us up, confuse us and cause us to incorrectly understand conversations with others. In order to put an end to the confusion, we have put together a short list of the business structures, namely sole proprietorship, partnerships and companies, and their definitions.
1. Sole Proprietorships
According to SARS, Sole Proprietorship is any business owned and managed by an individual without separation from this individual. This means the business (whether by the owner’s name or a business name) is filed under the owner’s individual tax and not a separate business tax submission.
SARS defines a Partnership as a very similar concept to a Sole Proprietorship, except that the business consists of two or more individual owners. Each individual will invest in the business, being liable for profits and losses and will be taxes according to their shares within the business.
Finally, a Company is any business, consisting of any number of owners, that is set up as outside of the owner’s personal entity. This means it will be taxed separated and profit will not automatically be the personal property of the owner.
Read a bit further…
For more information on Sole Proprietorship
For more information on Partnerships
For more information on Companies
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If you have any questions, need help understanding the ins and outs of ensuring you are complying with business finance legalities, contact us at firstname.lastname@example.org, via our website, or on social media.