Lesson Plan for Fundamentals of Accounting Business and Management

I. Objective: To identify and explain different principles, tools, and techniques in creating a
business.

II. Subject Matter

A. Topic: Principles in Creating a Business
B. Sub-topic: Forms of Business Organization
C. Reference: Curriculum Guide in Fundamentals of ABM I

III. Procedure: Preliminary Activities

1. Prayer
2. Checking of Attendance
3. Motivation: Can you name Business Organizations you see in Tacloban City?
Have you ever wondered who run them and how they are being run?

A. Activity
Group the class into four and assign them a specific type of Business organization. Provide
the whole class set of meta strip indicating various characteristics that identify each type of
Business Organization and have each group choose which meta strips will best describe the
Business Organization assigned to them.

Sole Proprietorship Partnership Corporation Cooperative

Have each group attach the meta strips in the chalkboard arranged in columns under their
assigned type of business organization.

B. Analysis:
1. How did you find the activity?
2. Based on the discussion above define the different forms of business organization.

C. Abstraction:
Forms of Business Organization
1. Sole Proprietorship- has a single owner called the proprietor who generally is also
the manager.
- Small service type (e.g physicians, lawyers and accountants, sari-sari store)
business and retail establishments.
 - The owner receives all the profits, absorbs all losses and is solely
responsible for all debts of the business.

2. Partnership- owned and operated by two or more persons who bind themselves to
contribute money property, or industry to a common fund, with the intention of
dividing the profits among themselves.
3. Corporation- owned by Stockholders.
- It is created by operation of law, having the rights of succession and
powers, attributes and properties expressly authorized by law or incident
to its existence. (Coca-cola, San Miguel Corporation)
4. Cooperative – entity organized by people with similar needs to provide themselves
with goods or services or to jointly use available resources to improve their
income. (Leyeco, PHCCI)

D. Application:
If you will engage into business, which form of business organization will you choose/prefer and
why?

IV. Evaluation:
Read carefully and give what is asked.
1. Enumerate and define the forms of business organization.
2. Give at least two examples for each business organization.

V. Agreement.
Research about the Tools in evaluating a business.

Prepared by:
Dennis de San Miguel
Teacher Applicant
Sole proprietorship:

Unincorporated business owned by one individual

Owner manages the business.

Dissolution: depends on owner’s decision, or his death.

Duration: depends on death or disinterest of owner.

Partnership:

Requires written agreement on parties

Owned by two or more people

Share profits equally (unless otherwise agreed upon)

Duration: Withdrawal/Bankruptcy

Legal status: owners are not separate from entity

Corporation:

Legal Entity or artificial person

Legal Status: Separate entity from owners

Limited liability of shareholders

Management: A director sets policies and appoints officers

Dissolution: Does not necessarily end

Duration: Can be perpetual

Cooperative:

Owned and controlled by people who use its products, supplies or services.

Promotes interests of less powerful members of society (farmers, workers, producers and consumers
found that they could accomplish ore collectively than they could individually.

Democratic election of board of directors.

The board of directors approves operating policies and manages funds.

Advantages of Sole Proprietorship

 You are your own boss

 You set your own hours
 Take in all profit

Disadvantages of Sole Proprietorship

 Supply all the money to operate business

 Unlimited Liability – No limit to how much money you can loss

Advantages of Partnership

 Raise more money

 Add partners
 More people = more skills

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 Complex legal structure

 Unlimited Liability

Advantages of Corporation

 Limited liability- corporation, not owners are responsible for debts.

 Easy to raise money – selling stock in company (shares of ownership)
 Profits paid to stockholders (dividends)

Disadvantages of Corporations

 Limited say in running company

 Elected Directors (elected by shareholders)