ENTREPRENEURSHIP 9

LAS N0. 2:
FOURTH QUARTER: WEEK NO. 3-4
HOW TO PREPARE THE MARKETING PLAN, PRODUCTION PLAN,
ORGANIZATIONAL PLAN AND FINANCIAL PLAN

Learner’s Name : ____________________________________________

Grade Level/Section : _________________________________________
Date : _________________________________________ ____________
Score : ______________________________________________________

I.LEARNING SKILLS
A. Most Essential Learning Competency
LO: 1. Identify the various legal forms of a business enterprise and their respective
advantages and disadvantages;
2. Identify the various government agencies that register business enterprises
as well as their basic procedural and paper requirements; and,
3. Enumerate the benefits which a small business person will derive from
registering his business.

II. INTRODUCTORY CONCEPT

In Module 7 on “The Role of Government in Developing Business Enterprises,” you
found out about the various programs and services which the government makes available to
small businesses. In order for your business to avail of these services, you should first make
your business legal. You will find out in this module that not all businesses are registered with
the government. You will also find out your options regarding what form of legal entity your
business may take as well as basic procedures to follow in registering your business. In the end,
you will begin to appreciate the benefits that you will derive from registering your business.

Choosing the Legal Form of your Business

A business first exits in your mind as an idea. As the idea is developed and is put down
in writing, it becomes a plan. As you gather materials, machines, and staff, you begin to make
your plan a reality. And when you register it, you make it a legal entity, with appropriate rights
and responsibilities.

A business first exits in your mind as an idea. As the idea is developed and is put down
in writing, it becomes a plan. As you gather materials, machines, and staff, you begin to make
your plan a reality. And when you register it, you make it a legal entity, with appropriate rights
and responsibilities.
1. Sole Proprietorship. A sole proprietorship is a business unit owned and managed by only
one person. It is the simplest and most common form.
 Most small businesses start as sole proprietorships. You, as the sole proprietor, own all
the assets. You make all the decisions.
 You take all the profits and assume all the liabilities. Because of this, your income from
the business is taxed as personal income. In the event of death, the business and all its
assets may be passed on to another person by virtue of a will.
2. Partnership. When two more people own the business, it is called a partnership.
Partnerships are formed for several reasons. The most common reason is to pool or
combine funds. Another reason would be to share responsibilities where the business
planned is more than what one person can handle. Equal partners share the initial
investment equally and each has the same amount of control over the business as the
other.
 A business partnership requires compatible personalities. This means that if you are
looking for a business partner, you should pick one whom you can get along with.
 Business partners share responsibilities and authority in running the business. But one
partner may choose to refer to the other certain aspects of the business.
 The property invested by a partner into the business becomes the property of both
partners. In effect, the property is no longer his own personal property.
 A partnership‟s lifespan is quite unpredictable. It may be dissolved as a result of any of
a variety of causes that could hardly be predetermined.
 A partnership contract is required to be registered with the Securities and Exchange
Commission (SEC).
3. Corporation. A corporation is a legal person. It is a legal person because it can do most
business acts that a natural person can do. As a separate legal person, the corporation may
enter into contracts, may sue and be sued, and buy shares in other corporations.
 You may organize a corporation for business and other purposes with four or more
other persons, provided most of you are residents of the Philippines. Your agreement,
known as the Articles of Incorporation, must be duly acknowledged and executed before
a notary public and filed with the SEC.
 The ownership of a corporation is divided into units known as shares of stocks. The
buyers of these stocks, called stockholders, are the owners of the business.
 The advantage of incorporating is limited personal liability. Unpaid taxes and debts are
not collected from the owners if the corporation is unable to pay. Another advantage is
the ability to capitalize the venture by sales of stock shares.

How to Register Your Enterprise

Some small-scale entrepreneurs do not register their business. These unregistered

enterprises are collectively known as the underground economy. Sometimes, they are also
known as the informal business sector.

By their very nature, underground enterprises get away with paying no taxes and paying
their workers lower than the legislated minimum wage rates. In a sense, they are free form
government intervention and control. But in another sense, they are prone to harassment by
law enforcers and government controlled bodies.

To be credible as a businessman, you need to issue official receipts that have been
registered with the Bureau in Internal Revenue. Remember, too, that only legal enterprises can
avail of most of the financing, marketing, technical, and other incentives the government makes
available especially to small enterprises. The complexity of registration varies according to the
legal form of the business. A sole proprietorship is the easiest to register while a corporation
requires the most elaborate procedures.

There is, however, a notable exception to the registration requirements of government.

Under a law called Kalakasan 20, rural enterprises employing less then 20 workers and
capitalized with not more than ₱500, 000 are exempt from registration.

Generally speaking though, enterprises have to go through the following:

1. Registering with the Department of Trade and Industry

 The Department of Trade and Industry (DTI), through its Bureau of Trade Regulation and
Consumer Protection (BTRCP) administers the registration of business names.
 If you are a single proprietor and your business is using a name other than your own
name, that business name should be registered.
 For partnerships and corporations, registration of business name with BTRCP is optional
since it is the Securities and Exchange Commission (SEC) which mainly handles
registration of these companies.
 You should register your business name with the DTIs regional office in the area where
your business name with the DTTs regional office in the area where your business is
located.
2. Registering with the Securities and Exchange Commission
 The Securities and Exchange Commission or SEC is the government agency that gives
the business enterprise legal personality. Only partnerships and corporations need to
register with the SEC. Sole proprietorships are not required to register.
 Some of the documents that have to be prepared and submitted in order to register with
SEC are the following: articles of partnership or incorporation and tax identification
number of each partner or incorporator, bank certificates of deposit, statement of assets
and liabilities, personal information sheets of directors or officers of the corporation, and
other documents.
3. Registering with the Local Government
 All businesses, whatever the legal form, are required to secure a mayor‟s permit or
municipal license from the municipality or city where they will operate.
 Different cities and municipalities vary in registration procedures, but most of them have a
business permit and licensing office which takes care of registering enterprises.
 When you have already obtained this permit, you are required to exhibit it in a
conspicuous place in your shop, store, or factory.
4. Registering with the Bureau of Internal Revenue
 Every business enterprise has to register with the Bureau of Internal Revenue (BIR) for
taxation purposes.
 The BIR shall issue a permanent record file number or what is known as tax identification
number (TIN) to your business. It also gives you authority to print books of account,
invoices, receipts, and other accounting records as well as register such documents to
make them official.
5. Registering with the Social Security System
 Employees of private firms are covered by social security benefits in the event of
sickness, disability, retirement, or death.
 As an SSS-registered employer, it is your duty to deduct a certain percentage from your
employees’ salaries as contributions as well as allocate from your own budget the
employer’s contribution for the employees‟ social security plan.
6. Registering with the Department of Labor and Employment
  Business establishments with five or more employees are encouraged to register with the
Department of Labor and Employment (DOLE) for the purpose of monitoring the firm’s
compliance with labor regulations. Registration is obligatory for bigger firms of 50 or more
workers.
7. Selective Registration with Other Agencies
 There are firms, depending on the type of products they manufacture or handle and their
market orientation, which are required by law to register with other government agencies,
aside from the ones mentioned above. Generally speaking, these agencies exercise
regulatory and control functions on industry sectors under their jurisdiction:
a. Food and Drug Administration – for those engaged in the manufacture of
drugs, cosmetics, and food products.
b. Philippine Coconut Authority – for those engaged in the export of coconut and
coconut by products.
c. Central Bank of the Philippines – for export-oriented firms.
d. Garment Trade Export Board – for all manufacturers of garments and textile for
exports.
e. National Food Authority – for rice, corn and floor dealers.
f. Fiber Development Authority – for processors and traders of fiber and fiber
products.
g. Bureau of Fisheries and Aquatic Resources – for those engaged in the export
of fish and fish productions and other aquatic products.
h. Bureau of Animal Industry – for exporters of animals and animal products and
byproducts.
i. Bureau of Plant Industry – for those engaged in the export of plant and plant
products.
j. Bureau of Forest Development – for exporters of forest products (e.g. logs,
lumber
products, and plywood).
k. National Tobacco Administration – for those engaged in the production or
export of flue-cured Virginia-type tobacco, Burley tobacco, and Turkish or
Oriental tobacco products.
l. Bureau of Food and Drugs – for exporters of food, drugs, and cosmetics.
m. Product Standards Agency – for commodity clearance of producers,
manufacturers, or exporters.
n. Philippine Patent Office – for firms who want to register their patents and
trademarks.
o. National Subcontractors Exchange, Department of Trade and Industry – for
those interested to tie up with export-oriented firms as subcontractors or suppliers
provided they fall under any of the following sectors: garments and handwoven
fabrics, gifts and housewares, furniture and fixtures, footwear and leather goods,
fresh and processed foods, and jewelry.
p. Trade and Regulation Division, Department of Trade and Industry – for
enterprises engaged directly or indirectly in the service, repair and maintenance
of vehicles, engines and engineering works, electronics, air conditioning and
refrigeration, office machines and data processing equipment, medical and dental
equipment, including the technical personnel like mechanics or technicians
employed by such firms.
III. ACTIVITIES

A. Answer True or False

1. The simplest and most common legal form of business is the sole proprietorship.
2. A sole proprietor is required to file a personal income tax as well as business income
tax separately.
3. In a partnership, profits should always be shared equally by the partners.
4. All partnerships have a lifespan of 20 years.
5. A partnership contract should be registered with the Securities and Exchange
Commission.
6. The best form of business is a corporation.
7. It is good to incorporate because incorporators have limited personal liability.
8. Foreigners cannot be owners of a corporation in the Philippines.
9. Most business enterprises should be registered with one or more agencies of
government.
10. A business need not be registered in order to obtain credit and other assistance from
the government.

B. Answer the following questions briefly.

1. Name four agencies that commonly register business enterprises.

____________________________________________________________________________
____________________________________________________________________________

2. What are the risks of a partnership?

____________________________________________________________________________
____________________________________________________________________________
 ANSWER SHEET
ENTREPRENEURSHIP 9
FOURTH QUARTER: LAS N0. 2 -WEEK NO. 3-4
HOW TO PREPARE THE MARKETING PLAN, PRODUCTION PLAN,
ORGANIZATIONAL PLAN AND FINANCIAL PLAN
Name:_______________________________________________ Score _______________
Grade & Section:_______________________________________ Date: ________________

A.
1. ___________ 6. ___________
2. ___________ 7. ___________
3. ___________ 8. ___________
4. ___________ 9. ___________
5. ___________ 10. ___________

B.
1. _________________________________________________________________________
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2. _________________________________________________________________________
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Students’ Signature Over Printed Name Parent’s Signature Over Printed Name

ENCAR MARIE A. SALVANTE

Subject Teacher