The Business Organizations PPP

THE BUSINESS
ORGANIZATIONS
Business organizations are plays a huge part
in the economy. Their main goal is to attract
customer, and earn profit. Businesses provide for
the needs, wants and demands of the economy.
Business have an important partnership with a
government since the business sector is also the
largest contributor of revenue to an economy.
Other than providing the needs of the economy,
the business sector also provides investments,
employment and social responsibility to an
economy. In return the economy provides the
necessary factors of production to businesses
(Marcelino, et al, 2010).
FORMS OF BUSINESS ENTERPRISE
SINGLE OR SOLE PROPRIETORSHIP

Single or Sole Proprietorship is a
form of business owned by a single
person. The owner is known s the
proprietor.
Business Start-up for a Sole
Proprietorship (Mejorada, 1999)
 Register the business name with the Department of Trade and
Industry(DTI);
 Pay the municipal licenses to the local government such as the
Business Permit;
 Apply for VAT or Non-Vat number with the Bureau of Internal
Revenue(BIR);
 Register with the BIR the books of accounts and the business forms
to be used with the BIR.
Positive Side of Sole Proprietorship

1. The following are the advantages of sole proprietorship business:
2. It is easy to organize.
3. The sole proprietor is the boss.
4. Financial operations are not complicated.
5. The owner/proprietor acquires all the profits.
Negative Side of Sole Proprietorship
1. The following are the disadvantages of sole proprietorship

business:
2. Limited liability to raise capital.
3. The sole proprietor has unlimited liability.
4. Limited ability to expand.
5. Business is entirely a responsibility of the owner.
Partnership
Partnership is a type of business

organization that is an association of at
least two or more persons who agree to
place money, property or industry in a
common fund with the aim of sharing
the profits among themselves.
Business Start-up for a Partnership
(Mejorada, 1999)
 Register the business name with the Department of

Trade and Industry(DTI);
 Have the partnership agreement (Articles of Co-
partnership) notarized and registered with the
Securities and Exchange Commission (SEC);
 Obtain tax identification number for the partnership
from the Bureau of Internal Revenue (BIR);
 Obtain pertinent municipal licenses from the local
government such as Business Permit;
 Obtain VAT or Non-Vat number with the Bureau of
Internal Revenue(BIR);
 Register with the BIR the books of accounts and the
business forms to be used with the BIR.
Types of Partners
Based on their Contribution
 A Capitalist Partner – is one that provides assets, such as money

and property, to be utilized as the starting capital of the business.
 A Industrial Partner – is one that swears to give services or labor to
the operation of the business.
 A Capitalist-Industrial Partner – is one that pledges money and
property as the starting capital of the business, as well as his
services.
 Based on their liability for partnership debts
 A General Partner – is one who is liable for
partnership problem, particularly the debts
of the business.
 A Limited Partner – is one whose liability for
partnership problems is limited.
Positive Side of Partnership
The following are the advantages of Partnership business:

 Easy to form.
 Flexibility of Operations.
 Efficiency in operations.
 Partners are expected to have great interest in the operation of the
partnership.
 Possibility of bigger resources.
Negative Side of Partnership
The following are the disadvantages of Partnership

business:
 Partners have unlimited liability for partnership
debts.
 It has limited life or it lacks stability.
 Limited ability to raise capital.
 Conflicts and quarrels between/among partners.
CORPORATION
A corporation is a form of business

organization in which the owners (known as
stockholders) have an undivided ownership
share in the assets of the corporation upon its
dissolution; and a share in its profits
corresponding to the amount of shares of
stock which they own.
Business Start-up for a Corporation
(Mejorada, 1999)
 Verification of corporate name with SEC;
 Drafting and execution of the Articles of Incorporation;
 Deposit of Cash received for subscribed of stocks in a banking
institution in the name of the temporary treasurer, in trust for and to
the credit of the corporation;
Filling of the Articles of Incorporation together with the following:
oTreasurer’s affidavit
oStatement of Assets and liabilities of the propose corporation;
oAuthority to verify bank deposits,
oCertificate of deposit of cash paid for subscription;
oPersonal Information sheet of the incorporators;
oCommitment to change corporate name if it is found similar to another
corporate name;
 Payment of filling and publication fees;
 Issuance by SEC of the certificate of incorporation;
 Registration of the corporate name with the DTI;
 Obtaining municipal licenses from the local government such as the
Business Permit;
 Obtain VAT or Non-Vat number with the Bureau of Internal Revenue(BIR);
 Register with the BIR the books of accounts and the business forms to be
used with the BIR.
Positive Side of Corporation
The following are the advantages of Corporation business:
 It has legal capacity.
 It has continued and more or less permanent existence.
 Management is centralized.
 It has the most efficient management.
 Shareholders have limited liability.
 Shareholders freedom.
 Ability to raise more capital.

Negative Side of Corporation
The following are the disadvantages of Corporation:

 Complicated to maintain and not easy to organize.
 Government intervention.
 Subject to higher tax.
 It has limited powers.
 Abuses of corporation officials.
 Some corporations are engaged in questionable activities.
 There is a very impersonal or formal relationship between the
officers and employees of a corporation.
Classifications of Different
Corporations (Mejorada,1999)
Corporation based on nature of its capital.
A stock corporation is one wherein the capital
is in the form of shares of stock.
A non-stock corporation is a corporation
which is open to all interested . There is no
dividend distributed among members, trusted
or heads.
Corporation based on purpose
A public corporation is owned, formed and
organized by the government.
A private corporation is owned, formed and
organized by private owners or businesses.
Corporation based on relation to another
corporation
A parent corporation is one which has
controlling interest (more than 50%) on
another corporation so that it has the power
either, directly or indirectly, to elect the
majority of the directors of such other
corporation.
A subsidiary corporation is the investor
corporation in which the parent corporation has
controlling interest.
Corporation based on situs of incorporation
A domestic corporation is a corporation created
under Philippine Law.
A foreign corporation is one that is formed,
organized or existing under the laws of another
country.
Corporation based on whether they want to open
in public or not:
A close corporation is limited to selected persons or
members of the family.
An open corporation is open to any person who may
wish to become a stockholder or member thereof.
VOTING IN CORPORATION
In a stock corporation, the manner of voting is called cumulative

voting- where a stock holder is entitled to cast votes equal to the
number of shares he owns multiplied by the number of directors or
trustees to be elected.
In a non-stock corporation, every member may cast as many votes
as there are trustees to be elected but may not cast more than one
vote for one candidate, unless cumulative voting is authorized under
the articles of incorporation.
Categories of Shares of Stocks in
the Philippines
1. Common stock
2. Preferred stock
3. Class A shares
4. Class B shares
5. Par Value shares
6. No Par Value shares
7. Founder’s shares
DIVIDENDS
Dividends are also called as the distributed

profits of the corporation. It represents the
corporation’s profit, which are distributed to
stockholders according to the proportionate
interest of their shareholding.
Kinds of Dividends
1. Cash
2. Property
3. Stock
4. Scrip
5. Bond
6. Liquidating
COOPERATIVES
Only organizations composed primarily of

small producers and consumers who
voluntarily join together to form business
enterprises which they themselves own,
control and patronize.
PRINCIPLES OF COOPERATIVES
1. Open and Voluntary Membership

2. Democratic Control
3. Limited Interest on Capital
4. Division of Net Surplus
5. Cooperative Education
6. Cooperation among Cooperatives
Objectives of a Cooperative
The primary objective of a cooperative is to provide goods and

services to its members, and thus enable them to attain increased
income and savings, investments, productivity, and our chasing
power and promote among them equitable distribution of net surplus
through maximum utilization of economies of scale, cost-sharing and
risk-sharing without, however, conducting the affairs of the
cooperative for eleemosynary or charitable purposes.
As provided under the Cooperative Code,
a cooperative shall provide maximum
economic benefits to its members; teach
members efficient ways of doing things in a
cooperative manner; propagate cooperative
practices and new ideas in business and
management; and allow the lower income
groups to increase their ownership in the
wealth of this nation.
GROUP 6
SALINAS, RENZ ROBERT

SINAJON, JESS AL II
SALAS, NOEL
AILYN, BANARES
FLEMING, FAMELA JOY
RAMBOYONG, MIKKO
CLAVO, JESSIE
REYES, LOUIS
CABATINGAN,
CARGANDO, EFRAEM

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THE BUSINESS

SINGLE OR SOLE PROPRIETORSHIP

1. The following are the disadvantages of sole proprietorship

Partnership is a type of business

 Register the business name with the Department of

Based on their Contribution

 A Capitalist Partner – is one that provides assets, such as money

The following are the advantages of Partnership business:

The following are the disadvantages of Partnership

A corporation is a form of business

The following are the disadvantages of Corporation:

In a stock corporation, the manner of voting is called cumulative

Dividends are also called as the distributed

Only organizations composed primarily of

1. Open and Voluntary Membership

The primary objective of a cooperative is to provide goods and

SALINAS, RENZ ROBERT

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