Dominguez, Ronald S.

February 24, 2021

Business Ethics and Social Responsibility

ACTIVITY 1

Ayala Corporation (CORPORATION)

Ayala Corp. is a holding company in the Ayala Group of Companies and is active

in the fields of real estate and hotels, finance and insurance, telecoms, water systems,

electronics, industrial technology, automotive, power generation, transport infrastructure,

international real estate, healthcare, education, and technology. It was founded in 1834

by Domingo Roxas and Antonio de Ayala. Ayala Corp. was then incorporated in 1968 and

was listed in 1976 on the Philippine Stock Exchange. Now, it is being handled by the

Zobel family, Jaime Augusto Zobel and Fernando Zobel specifically, a Filipino-Spanish

family.

What are the advantages of owning a corporation business?

• Continuity of existence – This means that corporations possess the quality of

continuing its operations when its owners pass away. Corporations has a legal life

of its own, separate from its owners. Theoretically, it can exist forever if ownerships

are being transferred.

• Limited liability – This quality of a corporation protects its owners and

shareholders from being personally held accounted from their company’s debts
 and financial losses. This means that the company is a different entity from its

owners, protecting the investors’, stockholders’, owners’ personal assets from the

risks of losses.

• Greater ability to acquire a bigger capital – As mentioned earlier, corporations

have stockholders, meaning that the source of capital is greater. Corporations can

also have investors where their financial contributions will open a lot more of

improvements and opportunities for the company.

• Flexibility - Corporate ownership is based on a percentage of stock ownership

that provides far more stability in terms of transfer of ownership and long-term

perpetuation of the company than other forms of organization, where ownership is

often easy to buy and sell.

What are the disadvantages of owning a corporation business?

• Heavier taxation – Because corporations are usually big companies, this also

means that they are responsible for a bigger tax. This can even be doubled

depending on the corporation type. There are instances where it must pay tax

based on its income after the shareholders pay taxes on the dividends they have

received.

• Unequal distribution of power – Power or the force of opinion can sometimes

depend based on how much stocks you have in the company. This results in

stockholders with lower stocks being inferior to those who have bigger stocks on

the company.
• High cost of formation and operation – As I have said, corporations are usually

big. This means that formation and operation will be expensive. Just from forming

the company, things like legal files, physical structures, etc. will require a high

budget. Operations and maintenance inside the company will also require a huge

financial budget.

• Complicated formation and management – Corporations are different from sole

proprietorship when it comes to legal files. It requires a lot of filings and

registrations from the government. This also means that the government has a

higher control over corporation businesses.