ZIMSEC O Level · Commerce · Form 3, Form 4
Private sector
- Sole trader: one owner, easy to start, keeps all profit, unlimited liability, limited capital.
- Partnership: 2 to 20 partners; more capital and skills; unlimited liability (except limited partners); disagreements possible. A partnership deed sets out the rules.
- Private limited company (Pvt) Ltd: owned by shareholders; limited liability; shares not sold to the public.
- Public limited company (Ltd): sells shares to the public, often on the Zimbabwe Stock Exchange; large capital; separate legal entity.
- Cooperatives: members contribute and share benefits (producer, consumer, savings and credit cooperatives).
- Franchises: a franchisee uses an established brand in return for fees.
Public sector
State-owned enterprises (parastatals) such as ZESA, NRZ and ZINWA provide essential services; local authorities run water, roads and markets.
Limited and unlimited liability
With limited liability, owners can lose only what they invested; with unlimited liability, personal property can be taken to pay business debts.
Exam tip: Compare forms of business under headings: ownership, capital, liability, control and profit sharing.
Check yourself
- What is the maximum number of partners in an ordinary partnership?
- Explain limited liability.
- Give two reasons why the government runs some enterprises.
Show answers
- 20.
- Owners are responsible for business debts only up to the amount they invested.
- Any two: provide essential services, avoid private monopolies, services unprofitable for private firms, national security.
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