Business Ethics (Reviewer)

Types of Business according to Ownership

- Sole proprietorship
- Partnership
- Corporation
Types of Business according to Activities

- Service Business
- Merchandising Business
- Manufacturing Business

Sole Proprietorship- a business owned by one individual for the practice of trade profession
Advantages
- Full control of operation
- Easy to start, easy to dissolve
- All profits go directly to the owner
- Less regulations
- The government taxes the owner and not the business
Disadvantages
- Unlimited liability- the owner is legally obliged to pay all business debts.
- Limited Life- the business ceases to operate if the owner dies, become insane, or is imprisoned.
- Difficulty in raising capital.
Partnership- a business owned by two or more individuals pooling their resources.
Articles of Co-partnership- written agreement among partners.
Contents of articles of Co-partnership
- Name of the Partnership
- Name of Partners
- Place of Business
- Partnerships effectively date
- Nature of Business
Advantages
- Increased potential because of combination of two or more strengths.
- Easy to form with proper agreementon its formation
- Less regulations compared to corporation
- Professional partnership is tax exempt
Disadvantages
- Unlimited liability of all members
- Limited Life- admission of a new partner of the retirement or withdrawal of a partner.
- High possibility of disputes and conflicts between partners.
Business Requirements
- Verify business name with Sec
- File articles of co-partnership with Sec
- Register the Business name with DTI
- Secure a barangay permit in the place where business is located
- Register the Business with BIR
- Register the business with SSS
Corporation- a business that required to have five but not more than fifteen incorporators.
Advantages
- More source of fund
- Easy transfer of ownership
- Liability is limited
- Unlimited commercial life
Disadvantages
- More regulations to be followed
- Profit is taxed by corporate tax rate
- Costly to incorporate
Business Requirements
- Verify Business name with Sec
- Draft and execute articles of incorporation
- Deposit the cash collected from subscription
- File articles of incorporation
- Register the business name with DTI
- Secure a barangay permit in the place where business is located
- Apply a business permit in the municipality where business is located
- Register the name with BIR
TYPES OF BUSINESS ACCORDING TO ACTIVITIES
Service Business- focuses in providing intangible products
Advantages
- No need for inventory
- Skills can be improved and can produce better service
Disadvantages
- Service are hard to value
- Less demands during economic downturns
Merchandising Business- also known as buy and sell.
Manufacturing Business- business which convert raw materials into finished products.
Advantages
 - There is a continuous demand on manufactured goods
- Job satisfaction can be ensured through output of the produced item
Disadvantages
- Owners of manufacturing business needs to keep up with high overhead cost
- Cost of manufactured products highly depends on the purchase price.