ORGANIZATION &

MANAGEMENT
First Semester – First Quarter
Week - 4

Disclaimer: This Learning Activity Sheet (LAS) is based from the Learner’s Materials, Textbooks and Teaching Guides released by DepEd Central Office.
Furthermore, utilization of duly acknowledged external resources is purely of nonfair use. All Rights Reserved.
LEARNING COMPETENCY
Differentiate the various forms of business organization (ABM_AOM11-Ic-d-
 9)

OBJECTIVES:
1. Differentiate the various forms of business organization
2. Identify the different characteristics of the various forms of the
business organization; and
3. Recognize the importance of the various forms of business organization
in the economy

FORMS OF BUSINESS ORGANIZATION

LESSON OVERVIEW

Business organization is determined by its ownership and may be classified

into a Sole-Proprietorship, Partnership and Corporation.

SOLE- PROPRIETORSHIP

- is a business venture owned by a

single individual who makes all
the decision of the business. The
owner enjoys all the profits and
liable for all the debts of the
business. This is the simplest
form of business organization
which is highly encouraged
among entrepreneurs.

Example: Small business such as local

grocery store, single art studio, flower
shop and the like.

CHARATERISTICS
ADVANTAGES DISADVANTAGES
 Simplest and easy to form, less  Handles all the responsibility
government requirements

 Total control of the business  Unlimited liability

operation and who makes the
decision

 Enjoy all the profits  Limited source of capital

 Taxed as personal income  Limited life span
 flexibility of operations
ACTIVITY 1
 Direction: Classify each given features and characteristics to which business
organization they belong.

FEATURES AND CHARACTERISTICS:

 Easy to administer
 Duties are shared by the owners
 Limited Liability of the shareholders
 Easier to obtain funding and raise capital
 Limited life span
 Ownership is transferrable
 Unlimited Liability
 Division of profits among partners
 Continuous existence
 Disagreements among members

Sole Proprietorship Partnership Corporation

ACTIVITY 2

Direction: Write AGREE, if the statement is correct and DISAGREE, if the statement is
wrong.

1. Registration of the business name of a sole-proprietorship

business must be done to the Department of Trade and Industry(DTI).
2. A partnership is considered as a legal entity which means
that it can enjoy most of the rights that an individual possesses such as it
can enter into a contract, borrow money, can sue and be sued.
3. A limited partner participates in the management of the
business aside from providing capital investment.
4. The sole-proprietorship business has a limited life span
because of its limited source of capital.
5. Business promotes economic development of the country
because of the taxes that they paid to the government are being used for
the construction of various infrastructures like bridges, schools and
hospitals.

ACTIVITY 3
Direction: Check (√) each given requirement if it is for the Sole-Proprietorship;
Partnership and Corporation.

Sole- Partnership Corporation

Proprietorship
1. Filing of previously prepared
articles of incorporation and
bylaws and bank certification
regarding stockholders shares of
stocks with the SEC
2. Business registration with the
DTI
3. Filing of previously prepared
partnership agreement by two or
more applicants with the SEC

4. Submission of two recent 2x2

ID picture
5. Payment of the registration fee

Formative Test

True or False. Write TRUE, if the statement is correct and FALSE, if the statement is
wrong.

1. Corporation has a continuous life through the

transferability of ownership.

2. To register the partnership here in the Philippines, the

partners must register the business name with the Securities Exchange
and Commission(SEC).

3. Making decision in a partnership is easy and does not

create any misunderstanding among them.

4. The owner of the sole- proprietorship enjoys all the profits

and responsible for all the losses of the business.

5. Putting up a corporation is easy and not too costly.