University of the East

Graduate School
Manila

Master of Science in Construction Management (MSCM) and

Master in Construction Management (MCM) Program

GCT_7102 : Construction Accounting and Financial Management

ASSIGNMENT # 1

Submitted to:
Dr. Virgilio Ventulan Salentes

Prepared by:
Jonathan Raynald T. Espino
1. What are the various forms of business organizations applicable to construction

firms?

Business organization describes how businesses are structured and how

their structure helps them to function well and achieve their goal. In general,

businesses are designed to focus on either generating profit. It is important to

have a proper business organization for a construction firm to be able to perform

well and generate profit for the company.

There are four forms of business organizations, these are sole

proprietorship, partnership, corporation and cooperative. These forms of

business organizations are all applicable to construction firms. It depends on the

specialization of the construction company and the monetary capability of the

owner.

a. Sole Proprietorship - is where the single owner operates the

business. This can be applicable to a person who wants to have a

construction firm alone.

b. Partnership - is a business owned by two or more people that requires

no filing of documents. Each partner participates equally in the

operation unless a formal partnership agreement says otherwise. This

applies to group of people either two or more individual who are going

to form a construction company together but with equal function, part

and responsibility for the company.

 c.  Corporation is a legal entity that is separate from its owners, called

shareholders. The shareholders do not necessarily operate the

business. Instead, shareholders elect a board of directors who then

elects the corporation's officers to operate the business. This applies to

a company with a huge number of people operating the business and

are in need of each other’s resources and influence to make the

company successful.

2. If you were the consultant giving advice to a group of new entrepreneurs

planning to form a construction business, what form of business organization will

you recommend? Why? 

I will recommend them to have a business organization set up

same to partnership. It is best to have this form of business organization

especially to new entrepreneurs. Because it requires an equal function

and allocation of resources for the owners. They can focus and help the

company perform well in terms of performance and monetary