Types of Business Ownership

and its Advantages and

Disadvantages
A Demonstration Teaching for Senior High School (ABM Strand)
OBJECTIVES
At the end of the session, students are expected to:

01 03
Identify what are the Cite examples of each type of
different types of business ownership.
business ownership.

02
Recognize the advantages
& disadvantages of the
main business ownership
types.
04
Educate participants of the
legal requirements for each
kind of organization and
ownership.
 Sole Proprietorship

A business entity that is started, formed, owned

or capitalized, and managed by a single
individual.
EXAMPLE
1. Sari-sari store
EXAMPLE
2. Grocery store
EXAMPLE
3. Coffee shop
EXAMPLE
4. Cafeteria
EXAMPLE
5. Computer shop
 Sole Proprietorship
Advantages Disadvantages
Ease of Start up Unlimited liabilities
Ease of management Difficulty in raising financial
capital
You keep all profits Limited managerial experience
No need to pay any business Limited size and efficiency
taxes
Ease to exit Limited life
Step-by-Step Procedure in Registering Sole
Proprietorship
1. Register a business name with DTI to acquire a DTI
Certificate of Registration;
2. Register with the Barangay Office where the business is
going to be located to acquire a Barangay Certificate of
Business Registration;
3. Register with the Mayor’s Office to acquire a Mayor’s
Permit; and
4. Register with the Bureau of Internal Revenue (BIR) to
acquire a Certificate of Registration.
 Partnership

A partnership is a group of two or more people

engaged in for-profit enterprise. In a partnership,
the co-owners (partners) share the company's
assets, liabilities, and profits in accordance with
the partnership agreement's conditions.
EXAMPLE
1. Hewlett Packard (hp)
EXAMPLE
2. Warner Bros.
EXAMPLE
3. Twitter
 Types of Partnership

1. General Partnership
It is an agreement in which two or more persons
agree to share in all assets, profits, and liabilities
of a business.
 Types of Partnership

2. Limited Partnership

A limited partnership (LP) exists when two or

more partners go into business together, but the
limited partners are only liable up to the amount
of their investment.
 Types of Partnership

3. Limited Liability Partnership

Limited liability partnerships (LLPs) allow for a

partnership structure where each partner's
liabilities are limited to the amount they put into
the business.
 Partnership
Advantages Disadvantages
Ease of management Unlimited liabilities
Easier to raise financial capital Limited partner is only
responsible for his initial
investment
No special business taxes Limited life
Easier to attract qualified Conflict between partners
worker
Step-by-Step Procedure in Registering a Business
in Partnership Form
1. Register Your Business Name at the Securities and
Exchange Commission (SEC). Prepare Articles of
Partnership.
2. Obtain a Barangay Clearance.
3. Register with the Social Security System (SSS).
4. Obtain Permit from the Mayor's Office.
5. Register Your Business with the Bureau of Internal
Revenue (BIR).
 Corporation

An organization called a corporation is one

whose shareholders choose a board of directors to
manage its operations. The corporation, not the
shareholders, is responsible for the operations
and financial health of the company.
EXAMPLE
1. Coca-cola Company
EXAMPLE
2. SM Supermalls
EXAMPLE
3. Petron Corporation
 Corporation
Advantages Disadvantages
Ease of raising financial capital Start-up expenses are high
Ability to hire Stockholders have a limited
liability
Limited liability Profits are taxed
Ease of transferring ownership Subject to more government
rules and regulations
 Step-by-Step Procedure in
Registering a Corporation
1) Reserve and Register Your Business Name in Securities
and Exchange Commission (SEC).
2) Acquire Barangay Clearance
Once the corporation is registered with SEC the next step is
to get a barangay clearance in the barangay where your
business is located.
3) Acquire Business Permit from the Mayor’s Office.
4) Register Your Business with the Bureau of Internal
Revenue (BIR).
THANK YOU!
-Raymart Pasucal Fajiculay