FORMS OF BUSINESS

ORGANIZATION
 A business is an organization that uses
economic resources or inputs to provide
goods or services to customers in exchange
for money or other goods and services.
Organization
An organization is defined as having two or more
individuals working together towards the attainment of
a goal or goals. A business is therefore an organization
formed in any of the following:

a.Sole/ Single Proprietorship

b.Partnership
c.Corporation
d.Cooperative
SOLE PROPRIETORSHIP
- This is the simplest
form of business
organization and only
one individual owns
the business.
• Companies owned by one person who is usually hands on in managing the day-to-day
activities.
• Sole proprietors own the entire business, including all profits and assets.
• Since they own all the assets, sole proprietors are also responsible for all the liabilities
of the business.
• Assets are resources with economic value that are owned and controlled by the
business owners.
• Examples: facilities, equipment, machinery, cash, office supplies, and raw materials.
• Liabilities are debts or obligations which arise in the course of the business
operations.
• Sole proprietors are considered single taxpayers and are assigned a single Tax
Identification Number (TIN).
• Owners also apply for a business trade name and register the business with the
Department of Trade and Industry.
 ADVANTAGES DISADVANTAGE
1. Ease of formation S
1. Unlimited liability

2. The owner has the full control of 2. Difficulty of raising

the business. additional capital

3. Owners can mix personal and 3. Owner’s bias

business assets.

4. Owners have all the profits for

themselves.

5. Simple taxation.
Examples: 1. Bookkeeping
2. Home Healthcare
3. Financial Planners
4. Landscaper
5. Computer Repair Services
6. Catering Company
7. Housecleaning Service
8. Freelance Writer
9. Tutoring
10. Virtual Assistant
PARTNERSHIP
“ It is a contract whereby two or
more persons bind themselves to
contribute money, property or
industry to a common fund with
the intention of dividing the
profits among themselves”. (Title IX
of the Civil Code of the Philippines)
• It is a form of business organization where ownership of the business is shared by two
or more members.
• The partners mutually agree as to how decisions will be made and how the profits and
the losses will be shared.
• They also agree on how future partners will be admitted and how disputes will be
resolved legally.
• The amount of contribution, the type of work to be inputted, and the time to be
devoted by each partner is also outlined to ensure a clear distinction of
responsibilities.
• Under the Civil Code of the Philippines, a partnership is considered a judicial person or
an entity having a separate legal personality from the partners.
• Partnerships with a capital of more than three hundred thousand pesos (300,000)
should register with the SEC.
• Income tax computations for partnerships are the same with corporations.
Forms of
Partnership
1.General

Partnership

2.Limited
Forms of
Partnership
1.General

Partnership
2.obligation
Limited
All partners have unrestricted liability for the debts
and of the partnership.

Partnership
One or more general partners have unlimited
 ADVANTAGES DISADVANTAGES

1. Easier to create than a 1.Unlimited liability

corporation
2.Mutual agency
2.Better ability to acquire
additional capital than sole
proprietorship
3.Limited life

3. Larger pool of human

capital than sole
proprietorships
Examples:
1. McDonald’s
2. Edison Electric Light Co.
3. Apple
4. Google
5. Microsoft
CORPORATION
An artificial being created
by operation of law,
having the right of
succession and the
powers, attributes and
properties expressly
authorized by law or
incident to its existence.
CORPORATION
It has a separate legal
personality from its owners.
It is juridical entity created
under the Corporation Code
and registered with SEC. It
should be established by or
composed of at least 5
natural persons and not
exceeding 15 persons,
technically called
• A corporation has a distinct personality separate from its owners.
• It is treated like an individual person with benefits from certain rights as well
as obligations and responsibilities.
• A corporation can enter into contracts, secure loans, sue and be sued, hire
employees, and pay taxes.
• A corporation has a minimum of five and a maximum of fifteen owners who
are called shareholders.
• Each shareholder owns a part of the company and has some authority over
its direction.
• Shareholders elect a board of directors who oversee the major policies and
decisions of the corporation.
• A corporation is owned and established under the Corporation Code and
regulated by the SEC.
• The shareholders of a corporation are also registered with SEC and are
assigned at least one share of the company stock.
• The total shares of the company stock that shareholders may acquire will
depend on the capital they have invested into the company.
• Their liability is only up to the extent of their share capital.
• The minimum paid up capital required of corporations in the Philippines is
5,000.
• Corporations are subject to tax, which is separate from the individual taxes
of its shareholders.
• Corporate taxes are not deductible from the individual taxes of shareholders.
This is because the corporation is a separate entity distinct from its
shareholders.
Two types of Corporations:
• Stock corporation – has capital stock divided into shares and
dividends.
• Surplus profits are given to shareholders depending on the
number of shares held.
• Non-stock corporation – does not issue shares of stock and is
established primarily for public interests such as a foundation for
charitable, educational, social, cultural, and other similar
purposes.
 Features of a
Corporation
1.Separate legal existence
2.Limited liability
3.Transferable ownership rights
4.Virtually unlimited life
5.Corporation management
6.Double taxation
ADVANTAGES DISADVANTAGE
S
1. Ability to acquire additional 1. Heavily regulated by the
capital government

2. Transferable ownership rights 2. Double taxation

3. Limited liability of stockholders 3. Not easy to form

4. Virtually unlimited life 4. More expensive to form

than sole proprietorships
5. Large pool of human capital and partnerships
Examples: 1.
2.
United Laboratories
Jollibee Foods Corporation
3. The SM Group of Companies
4. San Miguel Corporation
5. Ayala Corporation
6. The Philippine Long Distance
Telephone Company
7. Filinvest Development
Corporation
8. The Lopez Group of Companies
 Cooperatives
A duly registered association of
-
persons, with a common bond of
interest, who have voluntarily joined
together to achieve a lawful common
social or economic end, making
equitable contributions to the capital
required and accepting a fair share
of the risks and benefits of the
undertaking in accordance with the
universally accepted cooperative
principles.
BE READY FOR YOUR SHORT QUIZ

TODAY!
I. Identification
1. A _________is an organization that uses economic
resources or inputs to provide goods or services to
customers in exchange for money or other goods and
services.
2. A ___________ is having two or more individuals
working together towards the attainment of a goal or
goals.
3. Is a form of organization where two or
more persons bind themselves to contribute
money, property or industry to a common
fund with the intention of dividing the profits
among themselves.

4. This is the simplest form of business

organization and only one individual owns
the business.
5. A duly registered association of persons,
with a common bond of interest, who have
voluntarily joined together to achieve a
lawful common social or economic end.

6. An artificial being created by operation

of law, having the right of succession and
the powers, attributes and properties
expressly authorized by law or incident to
its existence.
7. A corporation has a minimum of five and a
maximum of fifteen owners who are called ____.

8. The minimum paid up capital required of

corporations in the Philippines is _________.

9. What is the meaning of SEC?

10. What is the meaning of TIN?

11-15. Give at least five (5) examples of
Sole/Single Proprietorship.

16-20. Give five (5) examples of Corporations in

the Philippines.
ANSWER
1. Business
2. Organization
3. Partnership
4. Sole or Single Proprietorship
5. Cooperative
6. Corporation
7. Shareholders
8. 5,000
9. Securities and Exchange Commission
10. Tax Identification Number
LESSON 1.2
FAIRNESS,
ACCOUNTABILITY
AND
TRANSPARENCY
FAIRNESS
 FAIRNESS
•Is perhaps one of the hardest, yet
most important to practice on a
consistent basis. Fairness refers to
equal treatment. For instance, all
shareholders should receive
equivalent consideration for
whatever shareholding they hold.
•Fairness in business refers to the
value of treating people with a
standard of performance that is
consistent and equal based on
commitments. It means giving the
customers a reasonable value for
their money.
ACCOUNTABILITY
ACCOUNTABILITY
•
Is perhaps one of the hardest, yet
most important to practice on a
consistent basis. Fairness refers to
equal treatment. For instance, all
shareholders should receive
equivalent consideration for
whatever shareholding they hold.
•Accountability is crucial in ensuring
high performance within an
organization. Managers must clearly
communicate their expectations to
the person who is responsible for the
specified action or task.
•Non-profit organizations have the
obligation to provide some
community benefit. Accountability
for non-profit organizations include
ensuring that they are effectively
providing this benefit service such as
feeding the homeless, protecting the
environment and so on.
TRANSPARENCY
 TRANSPARENCY
•Transparency means openness, a
willingness by the company to provide
clear information to shareholders and
other stakeholders. Transparency ensures
that stakeholders can have confidence in
the decision-making and management
process of a company.
•For instance, a company to be called
transparent has to open and willing
to disclose financial performance
figures which are truthful and
accurate.
1. Respect
2. Positive Public Perception
3. Staff Involvement
4. Customer Service
5. Image Management
 Fairness, Accountability and
Transparency for Socioeconomic
Development
“Equals should be treated equally and
unequal's unequally”.
- Aristotle
PRACTICES OF FAIRNESS, ACCOUNTABILITY AND
TRANSPARENCY IN PHILIPPINE BUSINESS
There are eleven (11) Philippine corporations that
made it to top 50 list. Four (4) are owned by the
Ayala group which are Ayala Corp., Ayala Land Inc.,
Globe Telecom Inc., and Manila Water Co., Philex
Mining Corp., and Philippine Long Distance
Telephone Co.
The other firms that were part of the list were
Aboitiz Equity Ventures of the Aboitiz clan, George
Ty’s GT Capital Holdings, Inc. and Sy family’s SM
Prime Holdings and BDO Unibank Inc.
LESSON 1.3

CODES OF
RIGHT
CONDUCT
COMMON vs GREATEST GOOD
Common Good
- is that principle that whatever
serves the most number of
members in a community is
considered good.
COMMON vs GREATEST GOOD
Greatest Good
- Is the principle that there is a
standard that people must
cooperatively strive for to maximize
the harmony in the community.
• Serving the common or greatest good requires
individuals to think beyond themselves. Serving the
common good is to think of other individual people as
well as oneself and the greatest good to think of other
groups of people to whom the individual is not a
member and creating a balance, a harmony between
and within.
• To not serve either the common or greatest good, is to
serve oneself or ones groups’ narrow interest, usually
at the expense of other people and groups. This gives
the greatest dangers and threats to the whole society.
CODES OF RIGHT CONDUCT
A code is a statement of shared values that prescribed
for right action. Therefore it necessitates that a code
must share characteristics with moral theory. A good
code, like a good moral theory, should encompass
internal consistency. Accordingly, what is right for one
person will be right for another, in every one, or at least
most situations. A code is analogous to moral theory of
behavior in that equally they are concern on proper
conduct of behavior.
 TWO TYPES OF MORAL
THEORY

1. CONSEQUENTIALIST

2. NON- CONSEQUENTIALIST
ASSIGNMENT
Define the words below:
1. CONSEQUENTIALIST
2. NON- CONSEQUENTIALIST
3. UTILITARIANISM
4. DEONTOLOGY
MORAL THEORY:
1. Consequentialist Theory
2. Non-consequentialist Theory
3. Virtue Theory
4. Care Ethics
CONSEQUENTIALIST
Focuses on the outcomes of
actions, settling on whether
or not an action is good by
knowing the results.
CONSEQUENTIALIST
Utilitarianism is a common theory
under this kind. “The greatest
good for the greatest number”, is
a familiar phrase that shows this
attitude.
NON- CONSEQUENTIALIST
It centers on the principle that an
action is good based on the
principle people follow and
regardless of the results of the
action.
NON- CONSEQUENTIALIST
Deontological approach is an example of this
theory. Deontological, means for duty or
obligation from the Greek word “deontos”. A
phrase that shows the attitude using this
approach is “People have an obligation to
respect the rights of the individual”.
VIRTUE THEORY
One decides “the right thing
to do” is based on an idea of
how virtuous person would
behave in such a situation.
CARE ETHICS
Instead of intellectual analysis, right
action consist of feeling from the heart.
This simply means that what makes an
action right is how greatly the action will
increase the network of caring
relationship.
UTILITARIANISM
Attempts to answer the question about
what a man ought to do. The answer to
this is that he ought to act to create the
best consequences. These consequences
includes all of the good and bad produced
by the act, whether after or during the act.
UTILITARIANISM
1. What is good
2. Whose well-being
a. Individual self-interest
b. Groups
c. Everyone affected
3. Actual Consequences or foreseeable consequences
 DEONTOLOGY
Is an approach that focuses
on the rightness or
wrongness of actions
themselves.
 DEONTOLOGY
Thus, whether a situation is good
or bad depends on whether the
action that brought it about was
right or wrong.
VIRTUE THEORY
Thus, whether a situation is good
or bad depends on whether the
action that brought it about was
right or wrong.
 CARE ETHICS
Ethics of care is centered on the
independence of all individuals. It considers
the reality that certain communities and
people are weaker than others, and that
strong ones should give more concern to
the weaker community depending on how
they are affected by their choice.