Close Corporation Notes and Exam Questions Business Studies Grade 12

Close Corporation Notes and Exam Questions Business Studies Grade 12 A close corporation, often abbreviated as CC, is a type of business structure that combines elements of both partnerships and companies.

Here are some key features

1. Limited Liability: Similar to companies, close corporations offer limited liability protection to their members. This means that the personal assets of members are shielded from the debts and liabilities of the business.
2. Membership: Close corporations have a limited number of members, typically between 1 and 10. Unlike public companies, CCs do not issue shares to the public and are usually formed by a small group of individuals with shared business interests.
3. Management: The management structure of a close corporation can vary, but it is typically less complex than that of a public company. Members of a CC often participate in the day-to-day management of the business, although they may appoint managers or directors to oversee operations.
4. Legal Formalities: Close corporations are subject to fewer legal formalities compared to public companies. For example, they are not required to hold annual general meetings or publish financial statements.

Examining Close Corporation Notes: To excel in Business Studies Grade 12 exams, it’s crucial to have a firm grasp of close corporation concepts. Here’s a breakdown of important points to include in your notes:

1. Definition and Features of Close Corporations
2. Advantages and Disadvantages of Close Corporations
3. Formation and Registration Process
4. Membership Rights and Responsibilities
5. Management Structure and Decision-Making
6. Dissolution and Winding Up Procedures
7. Case Studies and Examples

Exam Questions on Close Corporations: Now, let’s take a look at some sample exam questions to test your understanding of close corporations:

1. Explain the concept of a close corporation and highlight three key features that distinguish it from other business structures.
2. Discuss two advantages and two disadvantages of operating as a close corporation compared to a sole proprietorship.
3. Outline the steps involved in the formation and registration of a close corporation according to relevant legislation.
4. Analyze the roles and responsibilities of members in the management of a close corporation. Provide examples to support your answer.
5. Describe the process of winding up a close corporation and explain the implications for its members and creditors.
6. Evaluate the suitability of a close corporation as a business structure for a group of entrepreneurs planning to start a small manufacturing business. Justify your answer.