FORMS OF BUSINESS

ORGANIZATION
By

Maricris T. Domingo
OBJECTIVES

At the end of the discussion, the

students are expected to:
• a. define each forms of business
organization
• b. differentiate the forms of business
organization
• c. appreciate the role of business
organization.
 I have prepared four pictures
and I want you to look and ponder about
it.
(the teacher will show the pictures to the
class)

Class, take a look at the pictures on the

board.
What did you noticed in the first picture?
 SOLE

TO RSHI P
PROPRIE
The Sole proprietorship is the simplest business
form under which one can operate a business. The
sole proprietorship is not a legal entity. It simply
refers to a person who owns the business and is
personally responsible for its debts.
Advantages

• it is easy to form and operate

• the owner makes all the decisions
• the owner keeps all the profit
• easy to dissolve
• simple taxation
Disadvantages

• Unlimited liability
• Limited resources
• Limited life
• All Losses are borne by the owner
PARTNERSHIP
Partnership…….

Two or more persons bind themselves to contribute money,

property or industry to a common fund with the intention of
dividing the profit among themselves. Two or more persons
may also form a partnership for the exercise of a
profession( Civil code of the Philippines, Article 1767)

Advantages
Easy to Form
Joint Resources of Partners
Tax exempt if Professional
partnership but subject to
corporate tax if commercial
partnership
Disadvantages
Unlimited Liability
Limited Life
All partners may be held
liable for the action of one
partner
CORPORATION
Corporation…….

A corporation is an artificial being created By

operation of law, having the right of Succession and
the powers, attributes and properties expressly
authorized by law or incident to its existence. (The
Corporation Code of the Philippines)
The owners (stockholders) enjoy limited liability but
have limited involvement in the company’s
operations. The board of directors, an elected group
from the stockholders, controls the activities of the
corporation.
Advantages Disadvantages
1.Limited Liability of 1.Most Costly and
stockholders difficult to organize
2.Power of succession 2.Shareholders have
3.Transferable limited access and
ownership rights control over
4.Greater source of management and
resources operations
5.Renewable and 3.Corporations are
Perpetual life taxed at a flat 30%
income tax rate
COOPERATIVE
A cooperative is a business organization owned by a group of
individuals and is operated for their mutual benefit. The persons
making up the group are called members.

The nature of cooperatives is best summarized as:

apitalized by the member themselves

wned by the members themselves

perated by the members themselves

atronized by the members themselves

Advantages Disadvantages
Enjoy certain tax Requires continues
privileges education programs
for members
Promotes the The members have
concept of sharing active and direct
resources participation in the
business of the
cooperative