THE BUSINESS

ORGANIZATION
Business organization are a major component
in the economy.
Their main goal isnto attract customers, and to
consequently earn profits.
Businesses have an important partnership with
the government. For the economy, businesses
serve as a provider of goods and sevices to the
consumers
 Business and government work together for
progress and development.
Businesses pay the necessary taxes to the
government, and return, the government
provides the proper infrastructures.
FORM OF BUSINESS
ENTERPRISES
SINGLE OR SOLE PROPRIETORSHIP
Is a form of business owned by a single person,
known as the proprietor.
Most of the country's businesses (including
those which are not registered) belong to single
proprietorship.
Organizing a Sole Propriertorship
(Mejorada 1999)
 Register the business name (Department of
Trade & Industry)
 Pay the municipal licenses to the local

govenment.
 Apply for VAT or Non-VAT number.
 Register with the BIR the books of accounts

(simplified bookeeping records or journals

ledger) and the business form to be used
(sale invoices, cash sales invoices, official
recipts, etc.).
Advantages of Sole proprietorship
 it is easy to oganize
 Its organization and operation only involves

dew business requirments

 The simgle proprietor is the boss. The

proprietor has all the freedom in terms of

decision-making.
 Financial operarionts are not complicated. As

this type of bisiness is small-scale

 The owner acquire all profits. Its one of the

best advantages of single proprietorship.

Disadvantages of sole proprietorship
 Limited ability to raise capital.
 The sole proprietor has unlimited liability
 Limited ability to expand
 Business is entirely a responsibility of the

owner.
PARTNERSHIP
Partnership is a business organization that is an
association of atleast two or more persons wgo
agrer to place money, property or industry in a
common fund with the aim of sharing the
profits among themselves.

The Partnership agreemet can be oral or written

Organizing a Partnership (Mejorada
1999)
 Register the business name (Department of Trade &
Industry).
 Have the partnership agrement (Articles of Co-parnership)
notarized and registered with the SEC.
 Obtain a tax identification number for the Partnership
from the BIR.
 Obtain pertinent municipal licenses from the local
government.
 Obtain the VAT or Non-VAT number from BIR
 Register books of accounts (simplified bookkeeping
records or journaland ledger) and the business from to be
used (sales nvoice, cash sales invoice, offical receipts) with
the BIR
Content of Articles of Co-partnership
(Mejorada1999)
 Name of the partnership
 Names of the partners
 place of business
 Effective data of the parnership
 Nature of business
 Investment of each parner and corresponding

capital credit.
 Duration of Contract
 Rights, power, and duties of the partners
 Accounting period
 Manner of dividing profits and losses
 Liability of of the partners fro parnership

depts
 Compensation for services offerd by parners
 Treatment of partners additional investment

and withdrawals
 Procedures for settlement of partner's

interest upon dissolution of partnership

 Provision for settlement of disputes
Type of Partners
 Based on their Contribition- A capital partner
is one that provides assest, such as money
and property to be utillized as starting capital
of the business
 Based on their liability for partnership- A

general partner is one who is liable for

parnership problems, particularly the debts of
the business.
Advantages of a Partnership
 Easy to form- The requirments are technically the same with
sole-proprietorship The only addtional is the partnership
agreement.
 Flexibility of operation- There are only few owners in a
parnership business
 Efficiency in operations- Simply put two Heads are better than
one
 Partners are expected to have great interest in the operation
of the partnership- partner have thier own area of interest
and the responsibility which help in the smootg operation of
the business
 Possibility of bigger resources- Financial institution may
extend bigger loans to partnerships considering the combined
resources of the partners.
Disadvantage of partnership
 Partnership have unlimited liabilott for partnership debts-
This is one the identical disadvantages od single
proprietorship and partnership.
 It jas a limited life or it lacks stability (partnership is
unstable) Being a contract between the partners, it is
dissolved based on thier agreement or uppn the withdrawal,
incapacity or deatg of partner, or for other causes which
terminates a contract.
 Limited ability to raise capital- the amount of capital
depends on how much can be contributed by the partners.
 Conflicts and quarrels between/among partners- Conflict or
quarrels are the main reason why partnership is unstable.
CORPPRATION
Section 2 of tje Corporation code defines a
corporation as follow:
"A corporation is an artificial being created by
operation of law having the right of succession
and the powers, attributes and the properties
expressly authorized by law or incident ro its
existence"
Private corporation are governed by the
Corporation Code of the Philippines, per Batas
Pambansa Blg.68.
 A corporation is a form of business
organization in which the owners (known as
stockholders) have an undivded ownership
share in the assest of the corporation upon
its dissolution; and share in its profits
corresponding to the amount of share of
stock whic the own.
 A corporation jas specific obkective in

carrying out the business, in accordance with

a charter or articles od incorporation.
 SAN MIGUEL CORPORATION
 PITEL
 JOLIBEE
 TOTAL
Organizing a Corporation
 Verification of corporate name with SEC
 Drafting and executing of the Articles of

Incorporation
 Deposit of cash receive for subscribed share

of stocks in banking institution in the name

of the temporary treasurer, in trust for and to
the credit of the corporation.
 Filing of the Articles of Incorporation together

with the following:

a. Treasurer's affidavit
b. Statement of Assets andnliabilities of the
proposed corporation.
c. Authorithy to verify bank deposits
d. Certificatiom of deposits of cash paid for
subscription
e. Personal information sheet of the
incorporators
f. Commtmentnto change corporate ne if it is
found similar to another corporate name.
Content of Articles of
Incorporation(Sec 14 of the
Corporation Code)
 Name of the Corporation
 The Specific purposes for. which the corporation is being

incorporated
 The place where the principal office of the corporation is

to be located
 Terms for which the corporation exist.
 The names, nationalities and residences of the

incorporators.
 The number of directors or trustees 5-15
 If it is a stock corporation, the amount of its authorized

capital stock in lawful money of the phil. the number

shares into which it is divided.
 If it is nom-stock corporation, the amount of its capital,

the nationalities and residence of the contributors and

amount contributed by each.
 Such other matters as are not inconsistent with law and

which the incorporators may deem necessary and

convenient.
By-Laws
It may ne defined as the rules of action for the internal government of a corporation
and for the goverment of its officer, stockholders, and members.
 The time, place and manner of calling and conducting regular or special meetings
of the directors or trustees.
 Time and manner of calling and conducting regular or special meetings of the

stockholders or members.
 The required quorum in meetings of stockholders members and manner of voting

therein.
 The form of proxies of stockeholders and members and manner of voting therein.
 The qualification, duties and compensation of directorsor trustees and officers.
 The time for holding the annual electiin of directors or trustees and the mode or

manner of giving notice thereof.

 The manner of election or appointment and the term of office of all officers other
than dirctors or trustees.
 Incase of stick corporations the manner of issuing certificates.
 The penalties for violation of the by-laws
 Other matters that may be necessary for the proper and convenient transaction of

its corporate business and affairs.

Right of stockholders
 Right to attend and vote in person or by proxy at
stockholder's meetings. sec.50
 Right to receive dividends when declared. sec43
 Right to inspect corporate books and records and to
receive financial report of the corporation's
operations. secs.74&75
 Right to pre-emption in the issue of shares. Sec.39
 Right to elect and remove directors . secs.24&28
 Right to approve certain corporate acts. secs. 49-53
 Right to issuance of certificate of stock or
other evidence of stock ownership and be
registered as shareholders. sec63
 Right to transfer of stock on the corporate

books. sec.63
 Right to participate in the distribution of

corporate assets upon dissolution. secs. 118-

119
 Right to adopt and amend or cancel by-laes

or adopt new by-laws.

 Right to compel the calling of meeting of stockholders
when for any cause there is no person authorized to call a
meeting. sec.50
 Right to enter into a voting trust agreement. sec.59
 Right to recover stock unlawfully sold for delinquency.
sec.69
 Right to bring individual and representative or derivative
suits.
 Right to demand payment of the value of his share and
withdraw from the corporation in certain cases. sec.
41&,81
 Right to have the corporation voluntarily dissolved.
sec.118-119
Advantages of Corporation
 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
Disadvantaged of corporation
 Complicated to maintain and not easy to
organize.
 Government Intervention.
 Subject to higher tax.
 It has limited powers
 Some corporation are engaged in

questionable activities
 There is a very impersonal or formal

relationship betwwen the officers and

employees of corporation.
Classification of Corporation
1. Based on nature of its capital
2. Based on purpose
3. Based on relation to another corporation
4. Based on situs of incorporation
5. Based on whether they want to open in
public or not
Voting in a Corporation
In a stock corporation, the manner of voting is
called cumulative voting
- where a stockholder is entitled to cast
votes equal to the number of shares he owns
multiplied by the number of directors or
trustees to be elected.
Categories of Share of Stocks
1. Common stock
2. Preferred stock
3. Class A shares
4. Class B shares
5. Par Values shares
6. No par value shares
7. Founders' share
Dividends
It is also called as the distributed profits of
corporation. It represents the corporation
profit, which are distributed to stockholders
according to the proportionate interest of thier
share holding.
Kinds of Dividends
 Cash
 Property
 Stock
 Scrip
 Bond
 Liquidating
Cooperatives
Under the Presidential Decree No. 175, a cooperative is
defined as follow:
"Only organization composed primarily of small
producers and consumers who voluntarily join together
to form business enterprises which the themselves
own, control and patronize.
The government in its effort to promote the
organization of more cooperatives throughout the
country has extended several powers and privileges to
cooperative.
The Cooperative Code of the Philippines was created in
1990, by virtue of Republic Act No.6938
Principle of Cooperative
 Open and voluntary membership
 Democratic Control
 Limited interest on capital
 Cooperative education
 Cooperation among cooperatives.
Objectives of a Cooperative
The primary of every cooperative is to provide
goods and services to its members
 GOD BLESS
THANK YOU