Nature and Forms of

Business Organizations
  Is defined as the practice of what is morally and
ethically right in the conduct of business in the
workplace. It is essentially doing what is right in
any business transaction. All members of the
organization, from top management down the
Business line, should practice ethical standards that will
morally uphold the organization and sustain its
Ethics credibility and integrity at all times.
 • Macro. It clearly defines the crucial role of business
and reinforces the role of the government in the
delivery of benefits to its people in a morally upright
and ethical manner. Each society has code of
conduct which specifies how a business activity is
Levels of carried out, guided by national and international
Business ethical standards.
Ethics • Corporate. The corporate level in ethics represents
how each company interprets the rules and
standards of the industry.
• Individual. The individual level in ethics is the
employee’s own moral principles which guide his/her
life.
 Sole Proprietorship
 Managed by just one person who handles all
the activities on a day-to-day basis.
 Own all the assets including the profits of the
company.
Forms of  Sole Proprietors are also morally responsible
Business for the conduct of all business activities .
Organization
  Sole Proprietorship (Advantages)
 Easy to organize and inexpensive to put up.
Forms of  Freedom to make their own decisions and
Business have complete control of the business.
Organization  No one can prevent the proprietors if they
want to close the business.
  Sole Proprietorship (Disadvantages)
 The liabilities of a small business like sole
proprietorship can affect the credit
Forms of standing of the sole proprietors, resulting in
Business difficulties in obtaining additional capital.
Organization  Small business may mean small profit.
 Employees with excellent qualifications are
not attracted to small firms and they
usually apply in big companies.
 Partnership
 Is a form of business
organization where two or
members share in the business.
Forms of  Partners mutually agree on how
Business profits will be shared and how
Organization business will be conducted.
 Partners also agree on how
disputes will be resolved legally
and how additional partners will
be admitted.
 Partnership (Advantages)
Easy to put up and raise funds.
Forms of It is also attractive to potential
Business partners because of the profits
Organization shared and the incentive of
becoming a partner.
  Partnership (Disadvantages)
Forms of  Partners are jointly liable for all the debts
Business and obligations of the partners.
Organization  Have a limited life.
 Corporation
 Has a distinct personality separate from its owners.
 It enjoys certain rights and privileges just like an
ordinary individual.
Forms of  It can enter into contracts, loan and borrow money,
Business sue and be sued, hire employees, and pay taxes.
Organization  It has a life of its own and does not dissolve upon
the death or withdrawal of a shareholder.
  Corporation (Advantages)
 Shareholders have limited liability.

 Corporation (Disadvantages)
Forms of  Closely monitored by the government and
Business other agencies like the Securities and Exchange
Organization Commission and therefore requires more
paperwork to comply with permits and other
legal requirements.
 Corporations are subject to tax.
The Role of
Business in
Society To create wealth.
To meet the needs of the
people.
Thank you! 
 Identify the following terms.
1.A form of business organization intended for small businesses
and is usually managed by one person, the owner.
2.This level is characterized by the employee’s own moral
principles that guide his/her life.

QUIZ 3.Form of business organization which has a distinct personality

separate from its owners.
4.A form of business organization which has two or more
members share in the business.
5.This level in ethics represents how each company interprets the
rules and standards of the industry where it operates.
Answer the questions briefly.
1.Which form of business organization is less prone to
commit unethical behaviour? Why or why not?
2.Cite an instance when a sole proprietor is not acting
morally. Why do you think were his/her actions
immoral?
Rubrics for
Scoring