BUSINESS ETHICS AND

SOCIAL RESPONSIBILITY
GRADE 12 ABM

DIONIBELTON C. VILORIA
FORMS AND PURPOSE OF BUSINESS
ORGANIZATIONS
 When starting a business, one can organize the company
is several ways: sole proprietorship, partnership, or
corporation. How it is organized affects the company
and owners’ legal liability and the amount of income tax
one should pay to the government.
 Question #01: WHAT IS SOLE PROPRIETORSHIP?
 SOLE PROPRIETORSHIP-a business owned by a single individual and subject to
minimum legal requirements and capital.
 PARTNERSHIP- When two or more individuals come together, contribute
resources to form a business, and agree to divide the profit among them, a
partnership is formed. A partnership can hold (properties) and incur debts in
its name.
 CORPORATION- is an entity that is legally recognized as separate and distinct
from its owners. As such, like a person, it can own, buy, and sell things (ex.
Land, Cars, Etc.) It can enter into a contract, sue other persons or business,
and be sued by them.
ADVANTAGES AND DISADVANTAGES OF
STARTING A CORPORATION
 ADVANTAGES
 Capacity to hold property and exist as legal unit or distinct entity
 Exemptions of shareholders from individual liability
 Continuity of existence despite death or changes in shareholders
 Transferability of shares
 Centralized management under the board of directors
 Standardized methods for the protection of share holders and
creditors
 DISADVANTAGES
 COSTLY TO INCORPORATE
 POSSIBILITY OF TAKEOVERS BY OPPOSITIONS
 MINORITY
STOCK HOLDERS HAVE LITTLE POWER OVER
THE MAJORITY STOCKHOLDERS
 SUBJECT
TO GOVERNMENT RESTRICTIONS AND
CONTROLS
CONSIDERATION IN FORMING A BUSINESS
ORGANIZATION
 One form of business organization may be more
suited for particular type of business yet less
suitable for another. One must consider certain
factors, such as the nature of the business, the
capital needed, the tax liabilities, risks involved
in partnering with people, or managerial control
over the business.
NONPROFIT ORGANIZATIONS

 This organization is formed to serve a public purpose rather

than for financial gain. It is limited to charitable, educational,
scientific, religious, or literary purposes.
 EXAMPLES: PUBLIC SCHOOLS,CHURCHES,MUSEUMS, AND
REHABILITATIONS

 Such organizations are under the control of board of directors,

selected by the founders of the said organizations. Liabilities,
if any, are limited to just the violation of corporate assets.
COOPERATIVE

 A COOPERATIVE IS A BUSINESS OWNED AND CONTROLLED

BY ALL THE MEMBERS OF THE BUSINESS. Individuals or
companies who belong to the cooperative join together to
conduct business
 To market their product
 To purchase supplies
 To provide services
 Successful operations should increase profits and lower the
costs for its members.