Problem: Mr Mike Maaiers is an investor with limited funds to invest in a mining and manufacturing business in South Africa. He approaches you, a newly qualified MBA graduate, to provide him with advice as to the most appropriate business form to use for his venture. Upon further enquiry and discussion with Mr Mike Maaiers, the following overarching business objectives were agreed upon: • It would be necessary to raise additional capital over and above the investment of Mr Mike Maaiers; • The business would seek to mine / produce its own raw materials and then process it further in South Africa; • Maximum profits should be retained in South Africa; and • The business should be managed in the most ethical manner possible.
Advise Mr Maaiers on the most applicable / appropriate business entity / form for his venture, with supporting reasons thereto.