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Tuesday, August 1 11:00 AM

8/1/2020
DIANE FATIMA A. ROBLES
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Introduction

CHAPTER 5
OWNERSHIP AND
Classifications STRUCTURAL FORMS
of ownership
OF BUSINESS
ENTERPRISE

Topics

SUB-TOPICS

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 INTRODUCTION x
Introduction TYPES OF OWNERSHIP

- Ownership is a legal term

- As applied to business enterprise, the

Classifications term ownership means title to and
of ownership possession of the assets of the
enterprise, the power to determine the
policies of the operation, and the right
to receive and dispose of the proceeds.
Topics

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 CLASSIFICATIONS OF
OWNERSHIP
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Introduction

PRIVATE PUBLIC MIXED

OWNERSHIP OWNERSHIP OWNERSHIP
Classifications
of ownership
When an enterprise
When the organization Mixed ownership exists
is so organized
of the enterprise is when the elements of
that private
effected and management ownership are divided
individuals
is controlled by such that private
Topics exercise and enjoy
political bodies as a persons and public
the rights and
municipal, provincial, bodies share in the
privileges of an
or national government operation of the same
owner in their own
or by any enterprise.
interest, the
instrumentality created
ownership is said
by them, we have a
to be private
Pictures public ownership

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Introduction

TOPIC 1 TOPIC 2 TOPIC 3 TOPIC 4 TOPIC 5

Objectives

Topics

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Introduction

TOPIC 1 TOPIC 2 TOPIC 3 TOPIC 4 TOPIC 5

Classifications
of ownership SOLE PROPRIETORSHIP x
Where ownership is vested in one
person, we have a single
Topics proprietorship. This form of
ownership is small, requires but a
little amount of capital.

Sub topics

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SOLE PROPRIETORSHIP
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ADVANTAGES OF SINGLE
PROPRIETORSHIP
1. It is easy to start and to terminate

2. Control or management lies entirely

in the hands of the owner.

3. Only a small amount of capital is

required in starting.

4. Profits belong entirely to the owner

5. High credit standing

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SOLE PROPRIETORSHIP
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DISADVANTAGES OF SINGLE PROPRIETORSHIP

1. Limited judgement and wisdom

2. Limited amount of capital

3. Unlimited Liability

4. Difficulties of Management

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Introduction

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Objectives
PARTNERSHIP x
Article 1967 of the Civil Code
defines a partnership as an
Topics organization where “two or more
person bind themselves to contribute
money, property, or industry to a
common fund with the intention of
dividing the profits among
Pictures themselves.”

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 PARTNERSHIP
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As to object – A partnership is either

“universal” or “particular”.

As to Liability – Philippine law recognizes

two forms of partnerships, in so far as
liability is concerned. These are the
general partnership and the limited or
special partnership

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GENERAL PARTNERSHIP
- The business partnership is a business
relationship between two or more persons
competent to make contracts for the purpose
of engaging in a business activity.

AGREEMENT AND CONTROL OF PARTNERSHIP

The partnership organization is formed as easily
as that of a single proprietorship. By an oral or
written agreement, the partners outline the
nature of the enterprise, set forth their
respective rights and obligation, determine the
shares each one is to have and how the profits
are to be divided, and stipulate other terms and
conditions affecting their joint venture.
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ADVANTAGES

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ADVANTAGES OF PARTNERSHIP
1. It could be as easily formed as the
single proprietorship.
2. There are more persons to conduct the
business and to handle its problems.
3. A partnership has access to greater or
better credit facilities.

4. The combined ability and resources of

partners are a source of strength.

5. Retention of Valuable Employees

NEXT:
DISADVANTAGES

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DISADVANTAGES OF PARTNERSHIP
1. Unlimited liability of partners.

2. Disagreement between partners often lead

to delay and difficulties which could
endanger the enterprise

3. Easy dissolution

4. Frozen investment

NEXT:LIMITED
PARTNERSHIP

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LIMITED PARTNERSHIP
- To avoid the unlimited liability of all
the general partners in a general
partnership, the limited partnership was
evolved.

ADVANTAGES OF LIMITED PARTNERSHIP:

1. There is a single direction of management

2. The limited liability of special or limited

partners, serves as good inducement of
investments resulting in larger amount of capital
to carry on the business of the partnership.
NEXT:
DISADVANTAGES

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DISADVANTAGES OF PARTNERSHIP

1. The unlimited power given to general

partners may result in abuse

2. There is the possibility of collusion

among the general partners to defraud the
creditors and the limited or special
partners.

NEXT:KINDS OF
PARTNER

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KINDS OF PARTNER

1. GENERAL PARTNER 9. SILENT PARTNER

2. LIMITED PARTNER 10. DORMANT PARTNER

3. CAPITALIST PARTNER 11. NOMINAL PARTNER

4. INDUSTRIAL PARTNER
5. MANAGING PARTNER

6. LIQUIDATING PARTNER

7. OSTENSIBLE PARTNER
NEXT:KINDS OF
8. SECRET PARTNER PARTNER

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Introduction

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Objectives
COOPERATIVE
ORGANIZATION x
- A cooperative association has
Topics some elements of a large
partnership and also many features
of a corporation, although it is
distinct from both.

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 COOPERATIVE
ORGANIZATION x
KINDS OF COOPERATIVE ORGANIZATION:

1. THE CONSUMER’S COOPERATIVE

2. THE PRODUCER’S COOPERATIVE

3. THE MARKETING COOPERATIVE

4. THE FINANCING COOPERATIVE

NEXT:PRINCIPLES
OF COOPERATIVE

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ORGANIZATION x
PRINCIPLES OF COOPERATIVE
Pursuant to Section 3 of the Presidential Decree
No. 175 “Strengthening the Cooperatives
Movement” of President Marcos, it states- A
cooperative shall be governed by the following
principles:

(a) Open Membership

(b) Democratic Control

(c) Limited interest to capital

(d) Patronage fund NEXT: Power of

Cooperatives

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ORGANIZATION x
POWER OF COOPERATIVES
(Sec. 4) Cooperatives shall have the following
powers:

(a)To exercise the same rights and privileges given to

persons, partnerships and corporation provided under
existing laws;
(b)To establish and operate business enterprises of all
kinds as their needs dictates and their capabilities
allow subject to the provisions of existing laws;

(c) To establish rural banks under the Rural Bank Act

and/or to purchase government held preferred shares of
rural banks which may be converted to voting common
stocks under the rules and regulations to be promulgated
by the Monetary Board of the Central Bank and the
Agrarian Reform Fund Commission. CONTINUATION…

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ORGANIZATION x
POWER OF COOPERATIVES
(Sec. 4) Cooperatives shall have the following
powers:

(d)To enjoy all the privileges and incentives granted by

the NACIDA Act and those granted by all government
agencies to business organization under existing laws,
provided that all requirements are met.

(e) To petition the government to expropriate either

urban or rural lands for agricultural production, cottage
industry, business or housing purposes; and

(f) To own and dispose of property, to enter into

contract, to sue or be sued, and to do and perform such
other acts as may be necessary in the pursuit of its
objectives NEXT: Privileges
of Cooperatives

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ORGANIZATION x
PRIVILEGES OF COOPERATIVE
(Sec. 5) Cooperatives shall enjoy the following
privileges:

(a)Exemption from income taxes and sales taxes provided

that substantial portion of the net income of the
cooperative is returned to members in the form of
interest and/or patronage refund; provided, further, that
for income tax purposes, non-agricultural cooperatives
shall be exempt for a period of five (5) years and
agricultural cooperatives for a period of ten (10) years
reckoned from the date of registration with the
Department of Local Government and Community Development;
provided, finally that the taxable income shall mean that
portion of the cooperative’s income after deducting the
interest paid to members and patronage refunds.

CONTINUATION…

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ORGANIZATION x
PRIVILEGES OF COOPERATIVE
(Sec. 5) Cooperatives shall enjoy the following
privileges:

(b)In areas where appropriate cooperatives exists, the

preferential right to supply rice, corn, and other
grains, fish and other marine products, meat, eggs, milk,
vegetables, tobacco and other agricultural commodities
produced by members of the cooperatives concerned to
State Agencies administering price stabilization
programmed; and

(c) In appropriate cases, exemption from the application

of the Minimum Wage Law upon the recommendation of the
Bureau of Cooperatives Development subject to the
approval of the Secretary of Labor.

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Introduction

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Objectives
CORPORATIONS x
A corporation is an artificial
being created by operation of law
Topics having the right succession and
the powers, attributes, and
properties, expressly authorized
by law or incident to its
existence.
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 CORPORATIONS
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NATURE AND CHARACTERISTICS OF A
CORPORATION

1. It is an artificial business unit, and its creation is

through the process of law.
2. The basic structure of a corporation is simple.

3. The corporation organization is of wide scope.

4. The existence of a corporation is practically

permanent by operation of law.

5. The function of a corporation is public.

NEXT: KINDS OF
PRIVATE CORPORATION

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KINDS OF PRIVATE CORPORATION:

• STOCK CORPORATION

• NON-STOCK CORPORATION

NEXT:CORPORATE
OWNERSHIP AND CONTROL

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CORPORATE OWNERSHIP AND CONTROL

• The ultimate control of

the corporation rests in
the hands of the
stockholders.

NEXT: ADVANTAGES OF
CORPORATE OWNERSHIP

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ADVANTAGES OF CORPORATION

1. Ease of acquiring large amount of capital

2. Flexible ownership

3. Limited liability of stockholders

4. More or less permanent existence

5. Legal Entity

NEXT: OPERATIONAL
ADVANTAGES

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OPERATIONAL ADVANTAGES

1. The corporation offers an excellent mechanism

for mobilizing the large capital needed for
modern industrial operations.

2. It permits extended specialization in

management and equipment, factory organization,
labor, and marketing.

NEXT: DISADVANTAGES OF
CORPORATE OWNERSHIP

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DISADVANTAGES OF CORPORATE
OWNERSHIP

1. Organizational Expense

2. Government Restrictions and Reports

3. Lack of Personal Interest

4. Lack of Secrecy

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Introduction

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Objectives
CORPORATE COMBINATION x
Many of the conditions that led to
the development of the corporation
Topics suggested a further step – the
combining of two or more
corporations.

THE MERGER THE TRUST

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THE MERGER

- Sometimes called “integration”,

merger means the union effected by the
absorbing of one or more existing
corporations by another which survives
and continues the combined business.

NEXT: THE TRUST

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THE TRUST

-the trust as a form of business

organization had its origin in a
principle of law originally developed
for safe guarding the property of
minors and other persons not able or
willing to administer their own
affairs.

NEXT

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DIFFERENT FORMS OF TRUSTS

1. The simple or “dry” trust

2. The active trust

3. The investment trust

NEXT

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B. FORMS OF PUBLIC OWNERSHIP

• HOW PUBLIC CORPORATION IS

PROMOTED?
• HOW PUBLIC CORPORATION IS
ORGANIZED?

• HOW PUBLIC CORPORATION IS

OPERATED?
• THE NON-INCORPORATED PUBLIC
ENTERPRISES
NEXT

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DIFFERENCE BETWEEN PARTNERSHIP
AND CORPORATION

CORPORATION
PARTNERSHIP

VS

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Introduction

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Objectives

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Introduction

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Introduction

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