INTRODUCTION

LAW ON
BUSINESS ORGANIZATION
 DIFFERENT TYPES
OF
BUSINESS ORGANIZATION
1. Sole Proprietorship;

2. Partnership;

3. Corporation;
SOLE PROPRIETORSHIP OR
SINGLE PROPRIETORSHIP
It is a form of business
organization which is
owned by one person.
The owner personally
manages his business.
 ADVANTAGES AND DISADVANTAGES

ADVANTAGES DISADVANTAGES
1. Easy to form 1. Difficult to
2. Not expensive
raise capital
3. Low government
regulation 2. Unlimited
4. No corporate liability
taxation on the
business. 3. Limited life
of the firm
 PARTNERSHIP
It is a form of business
organization in which two or
more persons agree to own and
operate a business by combining
their resources (money,
materials, and management).
They also share their profits and
losses.
 ADVANTAGES AND DISADVANTAGES

ADVANTAGES DISADVANTAGES
1. Easy to form 1. Difficult to raise
capital
2. Less
expensive 2. Limited life
3. Unlimited
3. Moderate
liability in general
government partnership
regulation
 CORPORATION

A corporation is a form
of business enterprise
that is owned by
shareholders.
 ADVANTAGES AND DISADVANTAGES

ADVANTAGES DISADVANTAGES
1. Unlimited life 1. Double
2. Easy taxation
transferability 2. Complex and
3. Limited time-taking
liability charter filing
4. Easy to raise process.
capital
FORMATION REQUIREMENTS
FORMATION REQUIREMENT
SOLE PROPRIETORSHIP
Since it is the simplest form of
business it is the easiest to
register. It is registered through
the Bureau of Trade Regulation
and Consumer Protection
(BTRCP) of the Department of
Trade and Industry (DTI).
FORMATION REQUIREMENT
Registering a sole proprietorship with the DTI is
simple. The required information are as follows:
1. Proposed Business Name
(List 3 names in order of priority)
2. Business Address (Street Number, Name,
Barangay, Zip Code, City, Region)
3. Business Activities
4. Territorial Scope of business
(Barangay, city, regional or national)
5. Owner’s Full Name
6. Owner’s Address
7. Owner’s Date of Birth
FORMATION REQUIREMENT
8. Owner’s citizenship
9. Tax Identification Number or TIN of
the Owner

The DTI also requires any two (2) of

the following valid identification cards,
the original of which must be
presented for verification.
FORMATION REQUIREMENT
A sole proprietor must register with the DTI and
secure a Certificate of Registration. DTI
Registration is valid for 5 years.

At present, the owner is given the option to

choose his scope of business whether it be
barangay, city, regional or national.

If the scope of business is national there is no

need to apply for another registration for new
branch. If scope is barangay, the owner
registration is applicable to such barangay only.
FORMATION REQUIREMENT
PARTNERSHIP
Partnerships are recorded with the
Securities & Exchange Commission
(SEC). The following requirements
must be submitted with the SEC:
1. Name Verification Slip with the
reservation of the partnership name
2. Articles of Partnership
3. Registration Data Sheet
4. Affidavit of a partner undertaking to
change partnership name
5. Certificate of Bank Deposit
FORMATION REQUIREMENT
PARTNERSHIP
If a partnership has foreign partners,
the following additional
requirements must be filed:
1. SEC Form No. F-105
2. Bank certificate on the capital
contribution of the partners
3. For foreign partners who want to
register their investments with the
Bangko Sentral ng Pilipinas, proof of
the remittance
REQUIREMENT OF FORMATION

CORPORATION
In order to set up a corporation in the Philippines, the
incorporation process is lodged with the Securities &
Exchange Commission (SEC).
The following documents must be submitted with the
SEC:
1. Name Reservation/Verification Slip
2. Cover Sheet
3. Articles of Incorporation
4. Corporate By-laws
5. Registration Data Sheet
6. Registration Data Sheet (CAPITAL STOCK /
INCORPORATORS /DIRECTORS / OFFICERS
INFORMATION)
REQUIREMENT OF FORMATION

CORPORATION
7. Affidavit of Undertaking to Change Corporate Name
8. Treasurer’s Affidavit stating the amount of the shares of
stock subscribed and the amount of the subscription price
which has been paid-in to him as Treasurer-in-Trust of the
proposed corporation. He should likewise certify that at least
twenty-five percent (25%) of the authorized capital stock has
been subscribed, and at least twenty-five percent (25%) of
the amount subscribed has been paid-in to him for the
benefit and to the credit of the corporation.
9. Bank Certificate
The documents in Items 1 to 8 can be procured from the SEC.
The Bank Certificate will come from the bank where the
corporate funds are deposited.
 APPLICABLE LAW
1. Sole proprietorship
Republic Act No. 9178 Barangay Micro Business
Enterprises (BMBEs) Act of 2002
Effective February 2003
2. Partnership
Republic Act 386 Civil Code of the Philippines
Art. 1767 to 1842
Effective August 30, 1950
3. Corporation
Republic Act No. 11232 Revised Corporation Code
of the Philippines
Effective February 23, 2019
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 REFERENCES
R.A. No. 9178
R.A. No. 386
R.A. No. 11232
www.chegg.com
www.economicsdiscussion.net
www.coursehero.com
legal.ph
ndvlaw.com
google.com