FORMS OF

BUSINESS
ORGANIZATION
 COMPETENCY
Differentiate various forms of business
organization
WHAT IS BUSINESS?
BUSINESS is the
activity of making,
buying, or selling
goods or providing
services in exchange
for money
Basic Types of Business
according to activities
Manufacturing Business
Any business
that uses
components,
parts or raw
materials to
make a
finished good. 
Examples:

• Bakery
• Soap factory
• Sash factory
• Clothing factory
Merchandising Business This type of
business buys
products at
wholesale
price and sells
the same at
retail price.
Examples:

Grocery store
Electronic Shop
Shoe Retail Shop
Supermarket
Bookstores
Service Business
Service type firm
offers
professional
skills, expertise,
advice, and other
similar products.
Examples:

Any repair shop

Laundry shop
Consultation office
Clinic
Hybrid Business

A business that can

be classified in
more than one type
of business.
Examples:

Restaurants
Hotel & Restaurant
Internet Café
Catering Service
 Business Organization
It is an entity aimed at carrying on commercial
enterprise by providing goods and services, to meet
needs of the customers.
SOLE PROPRIETORSHIP

It is a type of enterprise
owned one person.
Easiest and least expensive form of
ownership to organize.
The business is easy to dissolve if
desired.
DISADVANTAGES

 Unlimited liability and are legally responsible

for all debts against the business.
 Often limited to using funds from the
personal savings or consumer loans.
Partnership
A contract where two or
more persons bind
themselves to contribute
money, property or
industry into a common
fund with the intention of
dividing the profits among
themselves. (Article 1767)
It is easy to organize as long as there is an
agreement between two or more persons.
The business usually will benefit from
partners who have complementary skills.
DISADVANTAGES

 Profits must be shared with others.

 Since decisions are shared,
disagreements can occur.
 A type of business
CORPORATION formed by not less
than five persons who
are called the
stockholders or
shareholders.
Corporations can raise additional
funds through the sale of stocks.
Freely transferable shares
DISADVANTAGES

 Requires more time and money than other

forms of organization.
 Monitored by state and some local
agencies, and as a result may have more
paperwork to comply with regulations.
 Cooperative
People-centred
enterprise owned,
controlled and run by
and for their common
economic, social, and
cultural needs and
aspirations.
Promotes economic advancement to members
in terms of social, educational status and
opportunity for growth.
Generates funds and extend credit to every
DISADVANTAGES
 It is hard to organize due to its complexity in
motivating people to join together
 Strictly regulated by the government especially
in the submission of various documents in the
registration of the cooperative.
 Additional Information
Sole Proprietorship needs to register a business
name at DTI to acquire DTI Certificate of
Registration.
Partnership and Corporation must be register with
the Securities and Exchange Commission.
Cooperatives must be register to the Cooperative
Development Authority.
End of Our LESSON!