The Role of Business in Social

& Economic Development

Chapter 1
 1 2 3
4 5 6
7
SPA / MASSAGE CLINIC
8 9
 1 2 3
4 5 6
7
BARBER SHOP
8 9
 1 2 3
4 5 6
7 8
GROCERY STORE/ SUPERMARKET
9
 1 2 3
4 5 6
7
RESTAURANT
8 9
 1 2 3
4 5 6
7
RESORT
8 9
 1 2 3
4 5 6
7
MALL
8 9
Nature and Forms
of Business Organization
Lesson 1
What is a Business?

 An activity where the economic resources

(inputs), such as materials and labor, are put
together (processed) to provide goods or services
to customers.
 3 General Types of Business (for Profit)

1. Those that provide services rather than products

Service Businesses
2. Those that sell products they purchase products from other
businesses.
Merchandising Businesses
3. Those that change basic inputs into products that are sold to
customers.
Manufacturing Businesses
Lesson Objectives:

1. Define and describe business and business organization

2. Identify the various forms of business organization
3. Compare and contrast the various forms of business
organization
4. Illustrate the role of each form of business organization in the
economy.
Forms of Business Organizations
1. Sole Proprietorship

 A business owned by one person.

2. Partnership

 An association of two or more people as partners

in business.
3. Corporation

 An entity created by law that is separate and

distinct from its owners
and its continued existence is dependent upon the
corporate statutes of the state
Comparison/ Contrast
among the various business forms
 Comparison
Sole Proprietorship
CHARACTERISTICS
 Undivided authority
 Low cost and license fees
 Tax savings)
 No restrictions on type of business (as long as legal)

 Unlimited liability
 Limitation size
 Limited management ability (to be jack of all trades)
 Comparison
Partnership
CHARACTERISTICS
 An association of individuals
 Co-ownership of property
 Mutual agency
 Limited life (partner may withdraw anytime; new one
comes in)
 Unlimited liability (each partner is liable for partnership
liabilities)
 Comparison
Corporation
CHARACTERISTICS
 Corporation has separate legal identity from its owners
 Stockholders have limited liability
 Transferable ownership rights
 Relative ease in obtaining capital
 Continuous business life
 Corporation and stockholders pay taxes separately
 Management is at discretion of the directors
If given the chance, will you go into business?
 Small Group Sharing

 What is the Role of Businesses in the

Economy?
Contributions of Businesses in the Economy

1. Economic development
2. Aids in Employment / Job creation
3. Creation of new/improved products or services
4. Creation of new machines in production
5. Assistance to general welfare
References

 1. Racelis, A. (2017), Business Ethics and Social Responsibility,

Rex Bookstore, Philippines