◄Unit 3: Communication SkillsUnit 5: Sectors of Production►

Unit 4: Forms of Enterprises

  • Unit 4: Forms of Enterprises

    TOPIC AREA: ENTREPRENEURIAL CULTURE

    SUB-TOPIC AREA: CONCEPT OF BUSINESS ACTIVITIES

    Key unit competence:

    To be able to analyse different forms of enterprises.

    Knowledge to be acquired

     The meaning of an enterprise.

     Forms of enterprises.

     Role of enterprises in socio -economic development.

    Application to daily life

     Categorise enterprises according to sectors,sizes and legal status.

     Appreciate the role of enterprises in the socio-economic development.

     Choose the most appropriate form of business enterprise.

    Introductory Activity

    Your school is an enterprise, so is the hospital you go to when you are sick. The poultry farm in your community is also an enterprise, so is the supermarket you buy foodstuff from. The hotel/restaurant is an enterprise so are the MTN, Airtel and Tigo telecommunication networks. The products (goods and services) we need to live a happy life or that are needed to produce other goods come from somewhere:

    • food from the gardens or markets.
    • clothes from factories or boutiques.
    • hair cuts and treatment from saloons.
    • moving from one place to another from transport agencies.

    Questions

    1 What do you think the term enterprise means?

    2 Identify some of the enterprises around your community.

    3 How would you classify the enterprises classified above?

    4 Look at your pen, book, shoes, uniform, and bag. To which form of enterprise does each belong to?

    5 Show how these enterprises contribute to socio-economic development of Rwanda

    4.1: Meaning of an Enterprise


    ACTIVITY 4.1

    In senior one and two, you looked at the concept of needs, wants, goods and services as well as markets. Using your background knowledge on those concepts, answer the following questions:

    1. Look around you and categorise the needs and the wants. Of the two categories, which one would you live without? Support your answer.

    2. In a market place, there are always goods and services, suggest some of the goods and services you know? Of the goods and services, which can you feel that you have consumed and which can you not feel? Support your answer.

    3. You have been told to buy a service from the market. Explain to a lay man the meaning of market. Is a market always physical? Support your answer.

    4. If you wanted to consume a good or service, who do you think would produce the good/service for you?

    5. Murenzi wants to consume a financial service, where do you think he can find that service?

    6. An enterprise is a business or company. Using the statement, describe an enterprise to a friend.

    7. Referring to your community,suggest any two (2) examples of enterprises you know.

    An enterprise is a business or company set with the aim of making profits.An enterprise is basically set up to provide goods and services at a profit.Enterprises can be classified according to sector of activities,size, legal status and lifespan.

    4.2: Classification of Enterprises


    ACTIVITY 4.2

    1. Briefly explain the meaning of the types of enterprises below.

    (a) Manufacturing enterprises.
    (b) Agribusiness enterprises.
    (c) Service enterprises.
    (d) Trading enterprises

    2. Give examples of enterprises explained above from your community and Rwanda at large by filling in the table below.

    Business enterprises are numerous and vary widely in the nature and types of goods or services provided. Their classification can therefore take many forms. The major bases upon which enterprises can be classified are by:

                  Sector or activities
                  Size
                  Legal status and
                  Life span

    A: Classification of Enterprises According to Sector or Activities


    Enterprises can be classified on the basis of the goods they produce or activities they do. On this basis, they can be classified as follows;

    1. Agri-business Enterprises

    Agri-business enterprises are business enterprises involved in the growing of crops and rearing of animals with the aim of making profits. Agri-business is basically carried out with the aim of producing food, meat, milk, eggs and wool for sale.

    The term “agribusiness” is also used to describe businesses that are involved in the marketing of farm products, such as warehouses, wholesalers, processors, retailers and more.There are different types of agri-businesses that are carried out in different parts of the country. These include:

    • Crop production: This deals with the growing and selling of crops. Crops that may be grown for sale include: coffee, tea, cotton, tobacco, fruits and so on.

    • Livestock farming: This is the rearing of animals for sale. Animals that are kept under livestock farming include: cattle for dairy or beef, goats, pigs, horses and sheep.

    • Poultry farming: This is the rearing of birds for sale. Birds reared under poultry farming include chicken, pigeons and ducks.

    • Horticulture: This is the growing of vegetables such as cabbages, carrots, greens, and tomatoes for sale.

    • Floriculture: This is the growing of flowers for sale.

    • Apiculture: This is the rearing of bees.

    • Aquaculture: This is the rearing of fish.

    Cross-cutting Issue: Environment and sustainability

    Agriculture involves a set of activities that transform the environment for the production of animals and plants for human use and thus agriculturalists have to be mindful and responsible of how they use the environment in order to conserve it for the current and future generations.

    Test skills acquired 4.1

    Give the examples of business enterprises in Rwanda involved in each of the agribusiness enterprises by filling in the table given below;



    2. Manufacturing/Secondary enterprises

    Manufacturing process raw materials into finished goods. They take raw materials from agri-business enterprises and process them into more refined/finished goods or services that can be used by the final consumer. The process of converting raw materials into finished products is known as manufacturing or processing.

    Manufacturing enterprises can be categorised as:

    • Textile manufacturing: These process clothing materials into finished clothes. Examples of textile manufacturing enterprises in Rwanda include UTEXRWA.

    • Beverage manufacturing: These enterprises are involved in the production of alcohols and soft drinks. Examples include: BRALIRWA, SKOL, INYANGE, COCA-COLA, SULFO and so on.

    • Agro-processing enterprises: These process agricultural products into finished goods such as Agasha which processes fruits into juice, Akabanga, Sorwatom, Gashumba posho and so on.

    • Extractive enterprises: These involve the extraction of raw materials from the earth to be used by consumers. The extractive industry consists of any operations that remove metals, minerals and aggregates from the earth. Examples of extractive processes include: oil and gas extraction, mining, dredging and quarrying. Examples of extractive enterprises in Rwanda include Ruliba enterprises and Cemerwa.


    3. Trading Enterprises

    Trading enterprises are also known as commercial enterprises. They deal in the buying and selling of goods. These enterprises are also involved in distribution facilitates. Trading enterprises are of two types, that is; retail trading and wholesale trading enterprises.


    4. Service Enterprises

    Service enterprises are business organisations that provide intangible products or benefits that satisfy customer needs in exchange of an acceptable compensation.

    A business that specialises in some form of service provision usually needs to have qualified staff members that are regularly available to provide services to the clients in time of need. Examples of services that may be rendered include; transport, warehousing, insurance, banking, beautification, communication and legal services.


    B: Classification of Enterprises According to Size

    ACTIVITY 4.3

    Visit your library or use the internet to research on the categories of enterprises according to size and fill in the table below:

    1. Micro Business

    Micro businesses are very small businesses which employ less than five people. Examples of micro businesses include: hawkers, kiosks, groceries, roadside vendors and so on.


    Features of micro businesses include:

    • Mainly operate with very little capital as little as Frw 150,000 but a maximum of Frw 3,000,000.
    • Mainly use very simple technology or simple methods of production.
    • Mainly employ unskilled people.
    • They depend on skills of their owners who may be assisted by family members.
    • Usually operate without registration; just require a trading license from local authorities.
    • Their sales are usually low in quantity and value because of limited capital.
    • They don’t own permanent premises; some rent premises, while others use temporary structures yet others are mobile.
    • They normally serve a small number of clients, so their market is small.
    2. Small Scale Business

    Small scale businesses are businesses bigger than micro businesses. Examples include: retail shops, restaurants, bookshops, bakeries and maize mills.

    Features of small scale businesses include:

    • Their capital ranges between Frw 3,000,000 to Frw 50,000,000.
    • Small Scale businesses mainly use simple technology and produce goods mostly for the local market.
    • They normally employ between 2 to 20 people.
    • Small Scale businesses are mainly started as sole proprietorships and others as partnerships
    • Their sales are relatively higher in quantity and value than micro businesses.
    • They usually operate from fixed premises that are owned by the proprietor or rented from other people.

    3. Medium scale businesses

    Medium scale businesses are bigger than small scale businesses. Examples include: big bakeries, milk processing plants, packaging businesses, coffee hulling factories and so on.

    Features of medium scale businesses

    • Medium scale businesses use capital of between Frw 50 million and Frw 500 million.
    • They directly employ between 20 to 100 people some of whom are skilled in specific areas of the business.
    •  They are mainly registered as joint stock companies or operate as partnerships.
    • Medium scale businesses mainly operate from large fixed premises usually owned by the business and fitted with electricity, water and telephone facilities.
    • They basically use sophisticated machinery and equipment operated by skilled operators.
    • Their output is usually high and they are able to produce for the local market and even export some surplus products.
    4. Large-scale businesses

    Large-scale businesses are business enterprises that require huge sums of capital to start operation. Examples include: banks, telecommunication companies, textiles, soft drinks manufacturers, cement factories and so on.

    Features of large scale businesses

    • Large scale businesses employ capital above Frw 500 million.
    • They directly employ over 100 people some of whom are highly skilled personnel like managers, accountants, engineers, technicians,etc.
    • They are registered as joint stock companies. Some are registered as joint ventures between private and government.
    • They use a lot of equipment and sophisticated machinery;they use some of the latest production methods.
    • Large-scale businesses produce goods and provide services on large scale for the local and foreign markets.

    C: Classification of Enterprises According to Life Span

    ACTIVITY 4.4

    Visit your Iibrary or use the internet to research on the categories of enterprises according to life span and fill in the table below:


    Enterprises can also be classified according to the length or period of time they are designed or intended to be in existence. Some businesses may be formed to last for a short time and come to an end. These are known as temporary business enterprises.There are also businesses which are formed to last as long as it is practically possible. These are known as permanent business enterprises.

    Temporary and permanent businesses are further explained below:

    1. Temporary or short term businesses

    Temporary or short term businesses are formed to provide goods or services for a short period of time, after which they are dissolved, ie. they cease to exist.The period of time of their existence may be determined either by their owners or by the period they need to accomplish the task they are formed to do.For example;

    • A school may wish to construct a new staff house and advertise inviting quotations from builders interested in undertaking the work. In response, two technical people; a mason and a carpenter may team together forming an enterprise where the mason builds the house while the carpenter carries out the furnishing of the house such as fixing doors, windows and wardrobes. At the end of the work when the house is complete, they are paid for the work and their relationship ends.

    • Two students of a technical training institute coming from different parts in Rwanda may find themselves together in a hostel in Kigali, where they may have to stay for at least six months before they return back to their colleges to complete their courses. While in Kigali for the six months, they may agree to form a business enterprise and do business jointly for that period. At the end of the period, the enterprise will be dissolved as they return back to their colleges.
    2. Permanent or long term businesses

    Permanent or long term businesses are businesses formed to last for as long as possible. There is no intention to bring it to an end within a specific period nor is it imagined that the nature of activities the business is intended to do have a time limit. Such businesses are referred to as permanent or long term businesses.

          

    D: Classification of Enterprises According to Ownership/Legal Status

    ACTIVITY 4.5

    Visit your library or use the internet to research on the categories of enterprises according to ownership or legal status and fill in the table below:


    The ownership of a business enterprise also determines its legal status. Ownership of an enterprise refers to the individuals or organisations which have raised the money invested in the business with the intention of participation or share the profits made by the business.Legal status refers to how the law treats the owners of the business. Although all business enterprises are governed by law, the degree of legal control over the enterprises varies with the type of ownership of the business.

    There are four major forms of business ownership recognised by law. These are; sole proprietorships, partnerships, joint stock companies and co-operatives.

    1. Sole Proprietorships

    A sole proprietorship business is the simplest and most common form of business enterprises in Rwanda. It is formed, managed and owned by one person, and hence the term sole proprietor. It can also be referred to as a sole trader or sale proprietorship business.


    Features of a retail shop
    • Sole proprietorships are formed, owned and managed by one person.
    • The owner provides all the capital required.
    • The owner is also fully responsible for all debts of the business. Where the business accumulated debts which the business cannot be able to meet from its financial resources, the owner will be required to pay the debts from his/her personal resources.
    • The law does not distinguish the owner of the business from the business.
    • The owner of the business has unlimited liability over all the debts of the business. Hence where the business is unable to pay its debts, the owner will be required to pay them.
    • The owner may employ other people to assist in the business operations.
    • All the profit of the business belongs to the owner. However, when the business makes losses, the owner bears them all.
    • All business decisions are made by the owner who does not have to consult anyone else in decision making.
    • Most sole proprietorships tend to remain small in size due to the limited access to financial resources.
    Sole proprietorships are most common due to the few legal requirements and procedures involved in the formation and the small amount of initial capital required to set them up. They are also easy to manage and control because of the few employees involved and limited government control, hence very flexible. However, this form of business enterprise is unlikely to continue in the event of the absence of the owner or upon his/her death.

    2. Partnerships



    A partnership is a type of business enterprise formed by two or more people referred to as partners, with the intention of making profits.

    There are two types of partnerships, namely;

    • Ordinary partnership: This partnership is formed by a minimum of two to a maximum of twenty people.
    • Professional partnership: This partnership is formed by professionals such as lawyers, accountants, doctors and architects. Such partnerships are limited to a maximum of fifty partners. Examples of partnerships include; Murenzi and Kayitesi company advocates, Rutayisire and Mutesi auditing firm, Kigali medical centre, and so on.
    A partnership is formed by individuals who sit together and agree on certain terms and conditions which will govern the starting and managing of the business in mind.

    The agreement may be in writing or verbal. Where the agreement is in writing, the written agreement is known as a Deed of Partnership. This agreement helps to guide the partners in all their operations in the business including the ratios of raising the capital, sharing of the duties and responsibilities and sharing the profits and losses of the business.

    Where the agreement is not in writing, then the obligations and responsibilities of the partners are governed by the Partnership Act.The partnership agreement also helps the partners in settling any misunderstandings that may arise in the course of their business operations.

    Partnerships have the following features;

    • They are formed and owned by a minimum of two and a maximum of twenty people in the case of ordinary partnerships and a maximum of ftfty people for the case of professional partnerships.
    • Partners raise business capital jointly. Hence they are likely to raise more capital than in the case of sole proprietorships.
    • The law does not distinguish between the business and its owners.
    • All partners have unlimited liability over the debts of the business. Where the business cannot pay its debts from its resources, all the partners will be required to meet the debts from their personal resources. Their private property can be sold to pay the debts of the business.
    • Partners have duties and responsibilities in the operations and management of the business as guided by the Deed of Partnership.
    • The action of one partner is binding to all other partners. Where it causes gain all partners benefit, but where it causes loss all partners suffer the loss.
    • B. In law, each partner is an agent of the business and therefore can buy and sell on behalf of the business.
    • The profit made by the business belongs to all the partners. It is shared in the proportion spelt out by the Deed of Partnership. Where there is no written partnership agreement, the sharing of the profit is based on the provisions of the Partnership Act. Where the partnership makes a loss, all the partners share the loss in the proportion spelt out, either by the agreement or the Partnership Act.
    • All business decisions are made jointly by the partners through consultations, consensus or majority vote.

    3. Joint Stock Companies

    Joint stock companies are also known as limited companies. They are business enterprises formed by two or more people under the Company Act to carry out business activities with the aim of making profits. The capital of a limited company is divided into small units known as shares. Each share represents an equal amount of money.

    For example, each share may equal Frw 20. Each individual wishing to be a member of the company is required to raise part of the capital of the company by buying the number of shares he or she can afford or as limited by the rules of the company.

    Such shares are known as a stock. Thus, each member of the company has or owns a stock of shares in the company, hence the term joint stock company. Thus, the company is owned by various individuals jointly through the stock they have bought in the company.

    Each individual owning shares in a limited company is also known as a shareholder. Shareholders are entitled to a share in the profits made by the company based on the number and type of shares each owns in the company.


    Types of Joint Stock Companies

    There are two types of joint stock companies. These are:

    a. Private limited companies: These are limited companies restricted by law to a minimum of two shareholders and a maximum of fifty shareholders. Their operations are strictly controlled by the shareholders.

    b. Public limited companies: These are limited companies where the law does not restrict the maximum number of shareholders. Thus, while the minimum number of shareholders in a public limited company is two, the law does not restrict the maximum number of shareholders. The maximum number of shareholders is determined by the number of shares available for sale. The shareholders of a public limited company do not have as much control as the shareholders of a private limited company over the operations of the company.

    Features of Joint Stock Companies

    Below are some of the features of joint stock companies:

    • Legal control: The formation, registration and operations of joint stock companies are strictly controlled and regulated by law through the Companies Act.
    • Legal entity: The law recognises a joint stock company as a legal entity and therefore distinctly separate from the shareholders of the company. The company is therefore treated as a person itself separate from its shareholders.
    • Limited liability: Shareholders of a limited company are not expected to pay the debts of the business beyond the amount of capital they have raised in form of shares. This protects the shareholders from being held responsible for the debts of the business beyond the amount of capital they have raised in the company.
    • Raising capital in form of shares: The capital of a joint stock company is raised through the sale of small units known as shares. Each share has a fixed value such as Frw 20. The capital is raised by selling these shares to individuals who wish to invest in the company. The individuals who buy shares in a company become its shareholders.
    • Managed by a board of directors: The management and operations of a joint stock company is carried out by a board of directors. The shareholders appoint the board of directors who are a selected team of experts in management and operations of an organisation.
    • Sharing of profits among shareholders: The profits made by a joint stock company are shared among the shareholders according to number and type of shares held by each shareholder. The shared profits are called dividends.
    • Perpetual existence: The death or withdrawal of a shareholder does not affect the capital of the company neither does it affect its existence. The company will continue in its operations in spite of the withdrawal or death of a shareholder.
    • Annual general meeting: It is required by law that every limited company should hold a meeting at least once a year to be attended by all shareholders during which the shareholders receive a report regarding performance of the company for the year, the recommendations of the board of directors and elect new board of directors. This meeting is known as an annual general meeting.
    • The use of the word “limited”: The Companies Act requires each joint stock company to end its name with the word limited” at the end to inform all individuals or organisations having dealings with the company that all shareholders of the company have limited liability.
    4. Co-operatives

    A co-operative also known as a co-operative society consists of a group of people with a common purpose who voluntarily come together, pooling their resources together in order to enjoy the economies of scale and improve their economic well-being.

    Cooperatives operate on the concept that by pooling their resources together and carrying out business as one larger entity with a common goal, they will enjoy economies of scale and members will improve on their economic well-being.

    This concept can be illustrated as follows: 50 students of a senior 3 class in a certain school are asked each to buy “Secondary Entrepreneurship for senior 3” a students’ text book which costs Frw 500 each.

    • If they go to a bookshop individually, each of them would spend 500 Frw.
    • If, however, they agree to contribute the money as a class and go to the same bookshop to buy the books at a discount, they would get a 20% discount on purchase of the books. Each student would save 100 Frw and hence each would need to contribute 400 Frw only for the same text book.
          

    Features of co-operatives

    The following are the features of co-operative societies;

    • Recognition as legal entity: In law, a co-operative society is recognised and treated as a legal entity distinctly separate from the members who form it.
    • Limited liability: The members of a co-operative society have limited liability. Their liability towards the debts of the society extends only up to the capital they have raised to operate the co-operative. Their personal properties are affected in case of debts of the co-operative.
    • Sale of shares to members: Co-operatives raise their capital through the sale of shares to those who wish to become members of the society. Each member is encouraged to buy as many shares as s/he can afford.
    • Voluntary membership: Membership to a co-operative society is free and voluntary. Anyone who qualifies to be a member may voluntarily join the society and is also free to leave or withdraw membership from the society at any time.
    • Equal participation: All members of a co-operative society have equal rights to participate in its affairs. Each member has only one vote irrespective of the number or type of shares s/he has in the society.
    • Democratic control and management: Each member of a co-operative society has equal rights to take an active role in the control and management of the society. The operations of a co-operative are democratically managed.
    • Common bond: All members of a given co-operative society have a common interest that brings them together. Such interest is known as a common bond. The most important objective of a co-operative society is to uplift the economic welfare of the members.
    • Profit sharing: The profit made by a co-operative society is known as a surplus. It is shared among the members of the society on the basis of the member contribution to the society. i.e. the level of business a member has contributed towards the society.
            


    4.3: The Role of Enterprises in Social-economic Development


    ACTIVITY 4.6

    Contribution of enterprises to the community

    Referring to your community, describe the contribution of the following enterprises to community development by completing the table below:


    Business enterprises play a major role in promoting economic development in the country. They benefit the country economically in the following ways:

    • Raising government revenue: Business enterprises contribute towards government revenue through;ƒ
    1. Business taxes they pay in order to operate their business. For example, business operating licenses.ƒ
    2. Business registration fees paid upon registration of a business.ƒ
    3. Taxes paid based on profits made by the business at the end of the year.ƒ
    4. Taxes they collect on behalf of the government such as value added tax (VAT) and PAYE (pay as you earn) from employees.
    • Provide employment: Most business enterprises employ workers to carry out the operations of the business who are paid for their services. Thus, they provide employment for many people. This has the effect of reducing the unemployment problem.
    • Other contributions to socio-economic development: Business enterprises also contribute to the social and economic development of the country in the following ways:ƒ
    1. Salaries and wages paid to workers are used by the workers to improve the economic welfare of their families. They are able to afford a better standard of living for their family members.ƒ
    2. Some business enterprises also contribute towards the development of the socio-economic welfare of the people through corporate social responsibility programs such as construction of access roads,building of schools, health facilities and other social amenities. They also undertake effective distributions of goods and services ensuring that they reach all customers in every part of the country.

    Cross-cuffing Issue: environment and sustainability

    Enterprises are very instrumental towards economic development of the Rwanda but as they operate and grow, owners or entrepreneurs must be responsible with the environment, for example, they ought to control air pollution and should have sewage systems that don’t pour wastes in water bodies.

    Unit Summary


    • An enterprise can be a project or undertaking that is especially difficult, complicated,or risky or a unit of economic organisation or activity that produces given products or services.
    • Business enterprise is the activity of providing goods and services involving financial, commercial and industrial aspects.
    • Enterprises are classified according to their sector of activities,size, legal status and life span.
    • Agri-business enterprises are business enterprises involved in the growing of crops and rearing of animals with the aim of making profits.
    • Manufacturing enterprises are enterprises that process raw materials into finished goods. These enterprises take raw materials and process them into more refined goods or services that can be used by the final consumer known as finished products.
    • Trading enterprises are enterprises that deal in the buying and selling of goods. They are sometimes known as commercial enterprises.
    • Service enterprises are business organisations that provide intangible products or benefits that satisfy customer needs in exchange of an acceptable compensation.
    • Micro enterprises are small businesses that employ a small number of employees. A micro enterprise will usually operate with fewer than 10 people and is started with a small amount of capital.
    • Small size enterprises are enterprises that operate on a small scale. Some of the characteristics of small size enterprises include;require little capital to be started for instance capital of 50 million Frw, they use some basic and simple technology in their operations,they employ up to around 20 people and most of these may be family members.
    • Medium size enterprises have some of the following features;they operate from well established and permanent premises. The premises are at times constructed according to the needs of the business. They require large capital to be operated, for example,capital of 500 million Frw.
    • Joint stock companies are formed by two or more people under the Company Act to carry out business activities with the aim of making profits.
    • Partnerships are business enterprises formed by two or more people referred to as partners, with the intention of making profits.
    • Cooperatives consist of a group of people with a common purpose who voluntarily come together, pooling their resources together in order to enjoy the economies of scale and improve their economic well-being.
    • Sole proprietorships are the simplest and most common form of business enterprises in Rwanda. They are formed, operated and owned by one person.
    General contribution of enterprises to socio-economic development

    • All enterprises pay taxes to the government which is used for socio-economic development.
    • Source of food: Much of the food we feed on comes from the agri-business enterprises.
    • Enterprises employ people and therefore are sources of income for the people they employ.
    • Service enterprises promote human health through provision of health services, treatment of people and development of human drugs.
    • Service enterprises such as schools are sources of knowledge through activities of teachers, journalists, broadcasters, libraries, internet web site builders and many others.
    • Service enterprises provide security, law and order to the community through the activities of police officers, army, security guards, community leaders and government officials.
    • Transport and communication enterprises enable people and goods to move from place to place and also for information to be transmitted from one place to another.
    • Some enterprises especially agri-business and agro-forestry enterprises are important in the conservation and protection of the environment.
    • Service enterprise are a source of leisure and entertainment such as sportsmen and sportswomen, musicians, actors, football players, film directors, cinema operators and many others.

    Unit 4 Assessment


    Case study: Different forms of enterprises

    Read the case study below and answer the questions that follow:

    Jean Paul Nyimana is a friend you have known for many years. He is a computer expert. He has been working for a large computer supplies company in Kigali for many years. The company supplies and services computers. Most people and organisations experiencing technical problems with their computers take them to the company where Jean Paul is assigned to service the computers. He is now well known by many people for his skills in handling technical problems relating to computer breakdowns.

    He informs you that he has been thinking of starting a business enterprise dealing with servicing and maintenance of computers. He has saved money for this purpose,but the amount is not quite sufficient for the type of business he would like to start. However, the money is sufficient to start a small size business.

    He also tells you that he has two uncles who are very rich. Both have a lot of money and have expressed their willingness to invest in the business enterprise with him.

    Nyimana would like to get your advice on various options of the type of enterprise to invest in.

    (a) Advise him on the forms of enterprises he can choose citing examples.
    (b) Analyse the advantages of each form of enterprise.
    (c) Analyse the disadvantages of each for of enterprise

    ◄Unit 3: Communication SkillsUnit 5: Sectors of Production►