SACRED HEART DIOCESAN SCHOOL

“Where peacemaking is life-giving”

Molave, Zamboanga del Sur
S.Y 2020 – 2021

Student’s Learning Activity in ENTREPRENEURSHIP 9

Learner’s Name: Grade Level : 9

Learner’s Contact #: Module No. 5
Lesson Title: Forms and Types of Business Organization Quarter / Week: 1-6
Values : Critical Thinking Activity No. 5
Reference/s: https://businessjargons.com/; Entrepreneurship in
the Philippine Setting by Winefreda B. Asor
Teacher: Mrs. Geraldine P. Martel (09482188316)
CONTENT STANDARD/S: The learners demonstrate an understanding of:
 the various forms of business organizations, as follows: Sole /Single Proprietorship, Partnership, Corporation, and
Cooperatives.
 the types of business according to activities, particularly:
1. service business
2. merchandising business
3. manufacturing business
PERFORMANCE STANDARD/S: The learners shall be able to:
 differentiate the forms of business organizations in terms of nature of ownership.
 differentiate the types of business according to activities.
OBJECTIVES: At the end of the lesson, the students will be able to:
 identify the advantages and disadvantages of each form of business organization.
 compare and contrast the types of business according to activities.
I TRANSITION (Linking Statements/Motivation)
Show What You Know
Take a few minutes to answer these brief, self-reflective True/False questions. This will give you a good idea of what
our topic is all about.
__________ 1. Every form of business ownership has advantages and disadvantages.
___________2. An advantage to starting your own business is that on average, you work fewer hours.
___________3. Sole-proprietorship is appealing because the owner bears unlimited liability.
___________4.Shareholders essentially own a portion of the corporation they have invested with.
___________5. A corporation is a separate legal entity distinct from its owners.
ESSENTIAL IDEAS (CONCEPT NOTES )
FORMS OF BUSINESS ORGANIZATION
1. Sole Proprietorship - a type of business organization in which an individual personally owns the business. The sole
proprietorship has no separate legal personality from its owner and the latter is personally liable for all its debts
and obligations. Registration of sole proprietorships is with the Department of Trade and Industry (“DTI”).
2. Partnership - formed when two or more persons bind themselves to contribute money, property or industry to a
common fund with the intention of dividing the profits and ownership among themselves. While the partnership
is a separate legal entity from its partners, the latter are personally responsible for the debts and obligations of
the partnership. Registration of partnerships is with the Securities and Exchange Commission (“SEC”).
Types of Partnerships:
1. General Partnership
Partners divide responsibility for management and liability, as well as the shares of profit or loss according to their internal
agreement.  Equal shares are assumed unless there is a written agreement that states differently.
2. Limited Partnership and Partnership with limited liability
“Limited” means that most of the partners have limited liability (to the extent of their investment) as well as limited input
regarding management decision, which generally encourages investors for short term projects, or for investing in capital
assets.  This form of ownership is not often used for operating retail or service businesses.  Forming a limited partnership
is more complex and formal than that of a general partnership.
3. Joint Venture
Acts like a general partnership, but is clearly for a limited period of time or a single project.  If the partners in a joint
venture repeat the activity, they will be recognized as an ongoing partnership and will have to file as such, and distribute
accumulated partnership assets upon dissolution of the entity.
3. Corporation - A corporation is a legal entity that is separate and distinct from its owners. Corporations enjoy most
of the rights and responsibilities that individuals possess: they can enter contracts, loan and borrow money, sue
and be sued, hire employees, own assets, and pay taxes. Some refer to it as a  "legal person." owned by several
people, called shareholders, and has a personality separate and distinct from them. Shareholders are responsible
for the debts of the corporation only up to the extent of their capital contribution. Corporations can either be
stock or non-stock and are controlled by the Board of Directors or Trustees. Registration of corporations is with
the SEC.
4. Cooperative - a form of business organization in which the business is owned and controlled by those who use its
services. A cooperative may be organized as a legal entity or it may be an unincorporated
association. Cooperatives are organized primarily for the purpose of providing service to their user-owners, rather
than to generate profit for investors. 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.
TYPES OF BUSINESS ORGANIZATION ACCORDING TO ACTIVITIES
 SERVICE BUSINESS - offers professional skills, advice and consultations.
Examples: Barber shops and beauty parlors, repair shops, banks, accounting and law firms
 MERCHANDISING BUSINESS - buys at wholesale and later sells the products at retail. They make a profit by selling
the merchandise or products at prices that are higher than their purchase costs. This type of business is also
known as "buy and sell".
Examples: book stores, sari-sari stores, hardware stores
Two Types of Merchandising Business
 Retailer – a merchandising business that sells goods directly to customers.
 Wholesaler – a merchandising business that sells goods to retailers.
 MANUFACTURING BUSINESS - buys raw materials and uses them in making a new product, therefore combining
raw materials, labor and expenses into a product for sale later on.
Examples: shoe manufacturing businesses, car manufacturing plants
 HYBRID BUSINESS - There are businesses that may be classified under more than one type of business. A bakery,
for example, combines raw materials in making loaves of bread (manufacturing), sells hot pan de sal
(merchandising), and caters customers’ orders in small coffee table servings of ensaymada and hot coffee
(service).

II LEARNING EXPERIENCE
A. CLARIFYING UNDERSTANDING (i.e. Cooperative Strategy & Active Learning
Identify if this is a Service, Merchandising, Manufacturing, or Hybrid type of business.
________________1. Provides services to customers
________________2. Sells goods to customers
________________3. Raw materials are available
________________4. Goods to be sold are purchased from a supplier
________________5. Goods to be sold are produced by the company itself
________________6. Supplies are used, no goods to be sold
________________7. Bakery
________________8. Barber shop
________________9. Cellphone store
________________10. EMCOR
B. PROCESSING QUESTIONS (Checking for Understanding, HOTS)
Answer the following questions concisely.
1. What distinguishes a merchandising business from a service business?
____________________________________________________________________________________________________
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2. 1. Differentiate a corporation from a partnership according to number of owners.
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C. ASSESSMENT (Formative/Summative)
A. Fill out the blank matrix.
Item Sole-Proprietorship Partnership Corporation Cooperative
No. of possible owners
Who manages the
business

B. Give two (2) examples of the following types of businesses.

SERVICE MERCHANDISING MANUFACTURING

III. FRAMING CONCEPT

1 thing I realized today was that______________________________________________________________________

That realization enabled me to ________________________________________________________________________
That realization enabled me to ________________________________________________________________________

IV. MASTERY EXERCISES (Post Assessment)

A. Multiple Choice
Encircle the letter of the correct answer.
1. The simplest form of business ownership is a
a. sole proprietorship b. partnership c. corporation d. cooperative
2. Which of the following is an advantage of a sole proprietorship?
a. ease of starting a business b. being your own boss c. pride of ownership d. all of these
3. The main disadvantage of a general partnership is
a. the unlimited liability of the partners b. disagreement among partners
c. shared management d. difficulty of termination
4. A ___________ is a business with two or more owners.
a. corporation b. conglomerate c. sole-proprietorship d. partnership
5. A form of business organization that is authorized to act as a legal entity regardless of the number of owners.
a. corporation b. distributor c. sole-proprietorship d. partnership
B. Identify the type of business of the following establishments.
_____________________1. La Pergola
_____________________2. Sacred Heart Diocesan School, Inc.
_____________________3. Juanita Enterprises
_____________________4. J Lechon Manok
_____________________5. Food Haus
V. LIFELONG LEARNING
Luke 19:13 "Calling ten of his servants, he gave them ten minas, and said to them, ‘Engage in business
until I come.’”
Write a short reflection about the passage.
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