San Francisco De Sales School

National Highway, City of San Pedro, Laguna

Learning Area Business Ethics and Social Responsibility

Learning Delivery Modality Modular Distance Modality

School San Francisco De Sales School Grade Level Grade 12

Teacher Mrs. Martha Jane Macasaet Learning Area BESR
LESSON EXEMPLAR
Teaching Date Quarter 3rd
Teaching Time 60 mins. No. of Days

I. OBJECTIVES
A. Content Standards The learners demonstrate an understanding of:
1. the nature and forms of business organizations.
2. the purposes of establishing business enterprises.
B. Performance Standard The learners shall be able to:
1. identify forms of business organizations and their characteristics.
2. explain the purpose of business organizations and their role in socioeconomic
development.
C. Most Essential Learning Differentiate the forms of business organizations in terms of their purpose and role in
Competencies (MELC) socioeconomic development.
II. CONTENT The Nature and Forms of Business Organizations
III.LEARNING RESOURCES
A. References
a. Teacher’s Guide Pages
b. Learner’s Material Pages
c. Textbook Pages
d. Additional Materials from
Learning Resources
B. List of Learning Resources Business Ethics and Social Responsibility – Grade 12
for Development and Alternative Delivery Mode
Engagement Activities Quarter 3 – Module 1: The Nature and Forms of Business Organizations
First Edition, 2020
IV. PROCEDURES
A. Introduction WHAT I NEED TO KNOW?
At the end of this module are expected to:
1. define business.
2. explain why people engage in business.
3. give the advantages and disadvantages of each form of business organizations.
4. create their own business and logo; and
classify the given characteristics of organizations.

WHAT’S NEW?
Directions: Answer the following questions on a separate sheet of paper.

You are all aware of online selling, right? What/Who are the most popular online selling
platforms/individuals? Do you think they earn big amount of money from online
transactions?

Answer:
_____________________________________________________________________________________________________
_____________________________________________________________________________________________________

Have you experienced being a seller? What item/product/service did you sell? Can you
still recall that experience?

Answer:
_____________________________________________________________________________________________________
_____________________________________________________________________________________________________

B. Development WHAT I KNOW?

Directions: Analyze each sentence below and write whether it is True or False. Write
your answers on a separate sheet of paper.

1. Business is a passive process.

2. Tax preparation is more difficult in a sole proprietorship than in a corporation.
3. A corporation is a separate entity distinct from all the owners.
4. Your liability as a shareholder is only limited to the amount of your investment.
5. A partnership may generate funds through selling shares of stocks.
6. A corporation may be owned by one person.
7. Handling money for a sole proprietorship is easier than partnership.
8. Book stores and sari-sari stores fall under the service businesses category.
9. Manufacturing businesses include baked goods and cosmetics.
10. The sole proprietor can pass the business down to his/her heir.
11. A sole proprietorship needs higher start-up costs.
12. Partnership business lacks formality compared with managing a limited company
or corporation.
13. Profit is the difference between the amount received and the amount spent on
something purchased, produced, or manufactured.
14. Merchandising businesses turn basic inputs into products which are sold to
consumers.
15. In a sole proprietorship, the owner decides alone.

WHAT’S IN?
Directions: Arrange the following jumbled letters to form the correct words as
described by the given clues. Write your answers on a separate sheet of paper.

WHAT IS IT?
A business is an active process which is an integral part of human society. It is an
organization where economic resources or inputs, such as materials and services, are
brought together and distributed to deliver or to give consumers goods, products, or
outputs. It involves significant operations such as buying, assembling, distributing,
advertising, selling, and accounting.
Most businesses aim to earn profit. The term profit refers to the difference
between the amount received and the amount spent on something purchased,
produced, or manufactured. The fundamental reason for examining business activities
from a moral point of view is that business organizations should, in principle, help
promote the common good and protect the rights and interests of individuals.

Three types of business organizations are generally operated for profit - service,
merchandising, and manufacturing businesses.

A. Service businesses provide services to customers rather than products.

Examples: computer repair, laundry services, tutoring, delivery services, wellness
(such as gym or spa), etc.
B. Merchandising businesses sell to customers products they buy from other
businesses.
Examples: sari-sari stores, bookstores, department stores, groceries, supermarkets, etc.
C. Manufacturing businesses turn basic inputs into products which are sold to
consumers.
Examples: shoe manufacturing, baked goods, candle manufacturing, cosmetics
manufacturing, wine production, etc.

Forms of Business Organizations

A. Sole Proprietorship- It is a one-person business. The owner has full control over the
finances and operations and decides alone.
Advantages:
1. Tax preparation is faster. Simply file an individual income tax return including
losses and profits to your business. Your personal and business income is
considered the same and the tax implications for self-employed individuals
would apply.
2. Sole proprietorship has lower start-up costs.
3. Handling money for the business is easier.
4. Sole proprietorships have the least government rules and regulations that
 affect them.
5. The sole proprietor can own the business for as long as he/she wants, and
when he/she wants to move out, he/she can cash in and sell the business.
6. Even in common practice, the sole proprietor can pass the business down to
his/her heir.
Disadvantages:
1. The sole proprietor is personally liable for all debts and actions of the
enterprise.
2. There is lack of financial control because of looser structure of sole
proprietorship.
3. There could be difficulty in raising capital.

B. Partnership- It is a business relationship between two or more people. It refers to an

arrangement where individuals share a business venture's profits and liabilities. The
partners give feedback on how to use the capital and other critical strategic decisions
that may provide different perspectives.
Advantages:
1. Partnership business lacks formality as compared with managing a limited
company or corporation.
2. It is easy to start. The partnership may be created either verbally or in writing.
3. You share the burden. You have companion and support.
4. Every partner would add his/her own expertise, skills, experience, and
connections to the business, thus giving it a greater chance of success.
5. There is better decision-making. Two heads are better than one.
6. There is privacy. The business deals may be kept confidential by the partners.
7. The partners own and control the business.
8. The more partners there are, the more funds are available in the company,
which can be used for possible expansion. Its borrowing capacity is also likely
to be higher.
9. There is an easy access to profits in a business partnership. The partners just
have to divide the profits.
Disadvantages:
1. The business does not have any independent legal status.
2. The business has no separate legal personality, so the partners are personally
liable for the debts and losses incurred.
3. The partnership business often seems to lack the sense of prestige more closely
associated with a corporation.
4. A partnership will often find it more difficult to raise money than a corporation.
5. There is a potential of differences and conflicts.
6. Decision-making can be slower because there is a need for consultation among
partners.
7. The profit must be shared among the partners.
8. It may require a lot of time and energy thus may affect life-work balance.
9. The profits earned by the partnership will be translated to income on the
individual partners. Thus, they are subject to income tax in the financial year in
which they are made.
10. There are limits on business development like unlimited liability, lack of
funding opportunities, and a lack of commercial status, etc.

C. Corporation. It is an entity created by law that is independent and distinct from its
owners and relies on the corporate laws of the state in which it is incorporated to
continue its existence. Corporations have an advantage in generating money for the
company. It can raise funds by selling shares of stocks. It files taxes separately from its
owners.
Advantages:
1. The liability of the shareholders of a corporation is limited up to the amount of
their investments.
2. A publicly held corporation may sell shares or issue bonds to raise substantial
amounts.
3. It is easy for a shareholder to sell shares in a corporation.
4. A corporation’s life has no limit, ownership can pass through many generations.
Disadvantages:
1. The corporation pays taxes on its income depending on its type and the
shareholders pay dividend taxes, so income gets taxed twice.
2. The management team of a corporation can operate the business without any
real oversight from the owners.

C. Engagement WHAT’S MORE?

A. Directions: Below are sentences that characterize the forms of business. Classify
them by writing each sentence to the proper column. Number one was given as an
example. Write your answers from numbers 2-10 on a separate sheet of paper.
1. It is a business relationship between two or more people.
2. It is operated and owned by one person.
 3. It is an independent entity.
4. The individuals agree to share profits and liabilities.
5. It can sell shares of stocks.
6. There is sharing of burden.
7. There could be difficulty in raising capital.
8. The decisions are made by a person alone.
9. It files taxes separately from its owners.
10.The owner controls fully the financial and operational matters.

B. Directions: Supply the appropriate information on the table. Copy the table and
write your answers on a separate sheet of paper.

WHAT I CAN DO?

A. Directions: Share your insights on the situation below. Write your answers on a
separate sheet of paper.

A rich relative of yours tells you that he/she is willing to lend you one million pesos
without any interest and ask you to start a business. What kind of enterprise do you
prefer? Describe it briefly.
_____________________________________________________________________________________________________
_____________________________________________________________________________________________________

B. Directions: Create your business logo. Use a separate sheet of paper for your
drawing.

D. Assimilation WHAT I HAVE LEARNED?

Directions: Answer the following questions on a separate sheet of paper.

1. Define business and its forms using your own words.

_____________________________________________________________________________________________________
_____________________________________________________________________________________________________

2. In your own words, differentiate sole proprietorship, corporation, and partnership.

_____________________________________________________________________________________________________
____________________________________________________________________________________________________

3. Why do people engage in business? You may explain your answer by providing an
example.
_____________________________________________________________________________________________________
_____________________________________________________________________________________________________

WHAT I CAN DO?

 A. Directions: Analyze each sentence below and write whether it is True or False.
Write your answers on a separate sheet of paper.

1. A corporation is a separate entity distinct from all the owners.

2. Tax preparation is more difficult in sole proprietorship.
3. Business is a passive process.
4. A partnership may generate funds through selling shares of stocks.
5. The liability of a shareholder is only limited to the amount of his/her investment.

B. Directions: Match the terms in Column A to its corresponding definition in Column B.

Write the letters of your answers on a separate sheet of paper.
A B
6. Corporation A. It is a business owned by one person only.
7. Sole proprietorship B. It is the amount received minus the amount spent.
8. Business C. It is an independent entity distinct from its
owners.
9. Partnership D. It involves important operations like advertising,
marketing, etc.
10. Profit E. It is a business venture by two or more people.

V. REFLECTION Write your personal insights about the lesson using the prompts below.

I understand that ____________.

I realize that __________________.
Prepared by: Noted by:

MARTHA JANE MACASAET LEVY P. TALAY

Teacher Principal