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    Forms of Business Organization

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    Mario Recto
    The document discusses the four main forms of business organization: sole proprietorship, partnership, corporation. Sole proprietorship is owned and run by one individual, while partnership involves two or more owners. A corporation is a separate legal entity owned by shareholders through transferable shares of stock, with ownership divided into shares. The key advantage of a corporation is that it can raise large amounts of capital by selling shares to the public, while shareholders have limited liability. However, corporations are more complicated to establish due to legal requirements.

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    Forms of Business Organization

    Uploaded by

    Mario Recto
    2K views18 pages
    The document discusses the four main forms of business organization: sole proprietorship, partnership, corporation. Sole proprietorship is owned and run by one individual, while partnership involves two or more owners. A corporation is a separate legal entity owned by shareholders through transferable shares of stock, with ownership divided into shares. The key advantage of a corporation is that it can raise large amounts of capital by selling shares to the public, while shareholders have limited liability. However, corporations are more complicated to establish due to legal requirements.

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    FORMS OF BUSINESS ORGANIZATION

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    The document discusses the four main forms of business organization: sole proprietorship, partnership, corporation. Sole proprietorship is owned and run by one individual, while partnership involves two or more owners. A corporation is a separate legal entity owned by shareholders through transferable shares of stock, with ownership divided into shares. The key advantage of a corporation is that it can raise large amounts of capital by selling shares to the public, while shareholders have limited liability. However, corporations are more complicated to establish due to legal requirements.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    2K views18 pages

    Forms of Business Organization

    Uploaded by

    Mario Recto
    The document discusses the four main forms of business organization: sole proprietorship, partnership, corporation. Sole proprietorship is owned and run by one individual, while partnership involves two or more owners. A corporation is a separate legal entity owned by shareholders through transferable shares of stock, with ownership divided into shares. The key advantage of a corporation is that it can raise large amounts of capital by selling shares to the public, while shareholders have limited liability. However, corporations are more complicated to establish due to legal requirements.

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    The passage discusses the four main forms of business organization: sole proprietorships, partnerships, corporations, and their basic characteristics and advantages/disadvantages.

    The four main forms of business organization discussed are sole proprietorships, partnerships, corporations.

    Some advantages of partnerships over sole proprietorships include higher capital from multiple owners contributing funds and easier operation similar to a sole proprietorship.

    FORMS OF BUSINESS

    ORGANIZATION
    Learning Objectives:

     I will be able to identify the forms of business


    organizations by nature of ownership.
    I will be able to give examples of businesses in my
    community and identify their form.
     I will be able to identify the advantages and
    disadvantages of the four forms of business
    organizations.
    How much is
    your daily
    allowance?
    Do you know that with
    your daily allowance
    you can own a
    company?
    Suppose you want to
    open a sari-sari store that
    will need PHP 10,000
    savings to start the said
    business.
    SOLE/SINGLE PROPRIETORSHIP

    A form of business is owned by one


    person; simplest, and the most
    common form of business organization
    It is not separate from the owner. The
    business and the owner are
    inseparable
    SOLE/SINGLE PROPRIETORSHIP
    ADVNATAGES
    • The owner keeps all the profits
    • The owner makes all the
    decisions
    • It is easy to form and operate.
    SOLE/SINGLE PROPRIETORSHIP

     DISADVANTAGES

    • The life of the business is limited to the life


    of the owner. Once the owner dies, the
    business will cease to operate under the
    name of the proprietor.
    • The amount of the capital is limited only by
    the wealth of the proprietor.
    What if he needed amount to start
    your dream sari-sari store in PHP 50, 000
    and you only have PHP 25, 000 cash
    savings. You ask Juan, your friend is
    willing to invest his PHP 25,000 and
    become part owner of the sari-sari
    store, Assuming he agrees, what form of
    business organization was created?
    PARTNERSHIP
    A formed of business owned by two or more
    persons. The details of the arrangement between
    the partners are outlined in a written document
    called articles of partnership
     Profitsare divided among partners based on their
    agreed sharing.
     The owner is called a partner.
    PARTNERSHIP
    ADVANTAGES
    • Higher capital because tow or more
    persons will contribute to the common
    fund.
    • It is easy to operate like sole/single
    proprietorship
    PARTNERSHIP
     DISADVANTAGES

    • The profits are divided among the partners


    • A partner can be held liable for the acts of the
    other partners.
    • In a lawsuit, the personal properties of the
    partners can be held beyond their contributions
    and may be used to answer for any liability of the
    partnership.
    Assuming your dream is to open a grocery
    store ant just a sari-sari store but you will
    need PHP1,000,000 to start the said business.
    You have only PHP25,000, your friend Juan
    has PHP 25,000 and your mother is willing to
    invest her PHP50,000, but still these are not
    enough to start your dream grocery store.
    Where will you get the money to raise the
    PHP1,000,000? You may consider setting up a
    corporation?
    CORPORATION
    A corporation is a business organized as a
    separate legal entity (artificial person) under
    the corporation law with ownership divided into
    transferable shares of stocks.
     Emphasize that it is the law (Corporation Code
    of the Philippines) that creates a corporation
     Thecorporation begin its existence from the
    date that Articles of Incorporation is approved
    be the SEC
    CORPORATION
     The SEC is the government agency primarily tasked to
    regulate private corporations in the Philippines.
     The owner are called stockholders or shareholders
     The word Corporation/Incorporation/Corp./Inc. appears in
    the name of the entity.
     The voting rights of a shareholder is generally based in the
    percentage of ownership.
     The management of the business is delegated by the
    shareholders to the Board of Directors
    CORPORATION
     The ownership is divided into shares and
    the value of one share may be dominated
    at a smaller amount, for example at PHP10
    per share
     Theproof or ownership is evidenced by
    stock certificate
    CORPORATION
     ADVANTAGES

    • Can easily additional funds by selling shares


    of stocks to the public
    • Shareholders are not personally liable for
    the debts of the corporation. The extent of
    their liability is limited to their
    equity(ownership) in the corporation.
    CORPORATION
    DISADVATAGES
    • It is relatives complicated to set up
    • Subject to several legal restrictions
    are listed in the Corporation Code of
    the Philippines

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