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Form of Org

This document discusses different forms of business organization including sole proprietorships, partnerships, corporations, and cooperatives. A sole proprietorship is owned by one person and has advantages like keeping all profits but disadvantages like limited life. Partnerships are owned by two or more people who share profits. Corporations are separate legal entities owned by shareholders through shares of stock. Cooperatives are associations of people with common interests who are members and owners.

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Jennifer
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82 views

Form of Org

This document discusses different forms of business organization including sole proprietorships, partnerships, corporations, and cooperatives. A sole proprietorship is owned by one person and has advantages like keeping all profits but disadvantages like limited life. Partnerships are owned by two or more people who share profits. Corporations are separate legal entities owned by shareholders through shares of stock. Cooperatives are associations of people with common interests who are members and owners.

Uploaded by

Jennifer
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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FORMS OF

BUSINESS
ORGANIZATIO
NS
Sole/single proprietorship - A
form of business is owned by one person;
the simplest, and the most common form
of business organization

Advantages
• The owner keeps all the profits.
• The owner makes all the decisions.
• It is easy to form and operate.
 
Disadvantages of sole/single
proprietorship.
 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 capital is limited
only by the wealth of the
proprietor.
 
Partnerships
A form 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.
Profits are divided among partners
based on their agreed sharing.
The owner is called a partner.
 
Advantages of a partnership

• Higher capital because two


or more persons will
contribute to the common
fund.
• It is easy to operate like a
sole/single proprietorship
Disadvantages of a partnership

• 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.
Corporations
 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.
 The corporation begins its
existence from the date the
Articles of Incorporation is
approved by the Securities and
Exchange Commission (SEC).
 The SEC (Securities and
Exchange Commission) is the
government agency primarily
tasked to regulate private
corporations in the Philippines.
 The owners 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 on the percentage of
ownership.
 The management of the business
is delegated by the shareholders
to the Board of Directors
 The ownership is divided into
shares and the value of one share
may be denominated at a smaller
amount, for example at PHP10
per share.
 The proof of ownership is
evidenced by a stock certificate.
 
Advantages of a corporation
Can easily raise 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.
Disadvantages of a corporation
It is relatively complicated to set up.
Subject to several legal restrictions as
listed in the Corporation Code of the
Philippines
 
Cooperatives
 A cooperative is a duly
registered association of
persons with a common bond
of interest, voluntarily
joining together to achieve
their social, economic and
cultural needs.
 The owners are called
members who contribute
equitably to the capital of the
cooperative.
Cooperatives
 The members are expected to
patronize their products and
services.
 The word ‘cooperative’
appears in the name of the
entity.
 This form of business
organization is regulated by
the Cooperative Development
Authority (CDA). 
Advantages of a cooperative
 Enjoys certain tax exemption
privilege
 Promotes the concept of sharing
resources

Disadvantages of a Cooperative
 Limited distribution of surplus
 Requires continuous education
programs for members.
 The members have active and direct
participation in the business of the
cooperative.

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