FORMS OF BUSINESS

ORGANIZATION
JENILUZ F. MAMAYSON
FORMS OF BUSINESS
ORGANIZATION
ACCORDING TO OWNERSHIP

● SOLE PROPRIETORSHIP
● PARTNERSHIP
● CORPORATION
● COOPERATIVE

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FORMS OF BUSINESS
ORGANIZATION
ACCORDING TO
BUSINESS ACTIVITY

● SERVICE BUSINESS

● MERCHANDISING BUSINESS

● MANUFACTURING
BUSINESS

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 “
ACCORDING TO
OWNERSHIP

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SOLE PROPRIETORSHIP
▪ It is owned by a single individual called Sole
proprietor, entrepreneur, or simply owner.
▪ Owned by only one person.
▪ Considered as the simplest form of business
organization.
▪ The government requirements for the sole
proprietorship are minimal.

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SOLE PROPRIETORSHIP
DISADVANTAGES

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PARTNERSHIP
▪ Is a contract of two or more person who bind
themselves together to contribute money,
property, or industry to a common fund with
the intension of dividing the profits among
themselves
▪ Owned by 2 or more person
▪ Division of profit and loss
▪ Mutual Agency
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PARTNERSHIP
ADVANTAGES

❖ Easier to form than a corporation

❖ Minimal government requirements

❖ Combined resources

❖ Larger pool of capital

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PARTNERSHIP
DISADVANTAGES

❖ Unlimited Liability

❖ Limited Life

❖ Mutual Agency

❖ Restricted transfer of Ownership

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CORPORATION
▪ Owned by 5 or more persons
▪ Stockholders or Shareholders
▪ An artificial being created by the creation of law
▪ Having the rights of succession, powers,
attributes, and properties, expressly authorized
by law, or incident to its existence

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CORPORATION
ADVANTAGES

Limited Liability Ease of transfer

of ownership

Power of Greater source Unlimited life

succession of capital

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CORPORATION
DISADVANTAGES

Taxed at 30% More government

requirements

Difficult to
Most Costly Double Taxation
Organize

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COOPERATIVE
▪ Owned and operated by the people who use its
products and services and who benefit from
what the company has to offer.
▪ Also known as, co-operative, co-op or coop
▪ Autonomous association of persons united
voluntarily to meet their common economic,
social, and cultural needs and aspirations through
a jointly owned enterprise.

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COOPERATIVE
● ADVANTAGES ● DISADVANTAGES
Lower costs Big investors don’t
Further Marketing get much attached
Reach Lack of
Democratic membership and
Organization participation

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ACCORDING TO BUSINESS
ACTIVITY

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SERVICE BUSINESS
✔ Provide or offers
intangible products
(services) to
customers

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MERCHANDISING BUSINESS
✔ Also known as
Trading business
✔ Buy ready-to-sell
products and sell it
to the customers
✔ Buy and sell

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MANUFACTURING BUSINESS
✔ Buy raw materials
and
convert/transform
these raw materials
into finished
products

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SERVICE BUSINESS

MERCHANDISING BUSINESS

MANUFACTURING BUSINESS

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Income
Measurement

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Income Measurement
● Problem # 1
A salon earned P80,000
during the month of October.
Salaries paid to staff
amounted to P40,000,
utilities paid for is P10,000,
and rent of the space for the
salon is P5,000, How much is
the net income of the salon?
25,000
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Income Measurement
● Problem # 2
A clothing store earned P300,000
from selling their clothes during the
month of March. These goods sold
were first purchased at an amount
of 180,00. Salaries paid to
employees were P40,000, utilities
paid is P15,000 and rent of the
selling are is P10,000. How much is
the net income/loss of the clothing
store?
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Income Measurement
● Problem # 3
A car manufacturing company sold 2 cars
totaling P4,000,000 during the month of
July. Car parts and materials used for
these cars amounted to P700,000, labor
costs paid amounted to P900,000 and
other indirect costs to manufacture the
cars amounted to P200,000. Salaries paid
to employees P55,000, utilities paid is
P25,000 and rent of the selling area is
P15,000. How much is the net income of
the car company?

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Thanks!
Any questions?

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