MOD1

• A corporation is a business organization systematically united for the accomplishment of a common purpose or undertaking for profit, allowed and regulated by law.
• Government agencies in the Philippines, like the securities and exchange commission (SEC), exercise adequate supervision over business organization activities and operations.
• The role of these agencies is to develop and foster good governance and enhance investor protection.
• Under the Corporation Code of the Philippines (Batas Pambansa Bilang anim na put’walo), corporations are established, not only for private gains but also as “Effective partners of the government in spreading the benefits of capitalism for the social and economic development of the nation.
• At the end of this module, students should be able to identify and elaborate on the attributes of a corporation, enumerate the different stakeholders of a corporation, distinguish between multinational and transnational corporation, describe how MNCs and TNCs affect the host countries, explain the fundamental principles of corporate governance, and detail the roles of the non-executive director, chief financial officer (CFO), audit committee and external auditor in governance.
• Business Organization have multiple roles in the society, the main role is to provide products and services needed, they also provide employment, the wages that employees receive are used to purchase other goods and services, profits from the organization are used to compensate stockholders, and as a percentage of the income is paid to the government as taxes, the taxes are used to provide infrastructure and pay for services for the Filipinos.
• Business Organization also greatly affect society in many other ways, they serve as catalyst to generate more income, as individuals require more food, housing, equipment, and other services, successful businesses contribute in the generations of more jobs income and boosts the economy of the nation.
• Forms of business Organization include Sole Proprietorship, Partnership, Corporation, and Franchise.
• GOCCs are "stock or non-stock" corporations "vested with functions relating to public needs" that are "owned by the Government directly or through its instrumentalities."
• Three attributes make an entity a GOCC: its organization as stock or non-stock corporation, the public character of its function, and government ownership over the same.
• The MECO is not owned or controlled by the government, hence it is not a GOCC or a government instrumentality.
• Private corporations may exist only under a general law.
• Such legislation would be unconstitutional.
• Congress cannot enact a law creating a private corporation with a special charter.
• The PNRC is sui generis and is neither a subdivision, agency or instrumentality of the government nor a GOCC or a subsidiary thereof.
• Since private corporations cannot have special charters, it follows that Congress can create corporations with special charters only if such corporations are government-owned or controlled.
• LWDs are not private corporations because they are not created under the Corporation Code.
• The Constitution authorizes Congress to create GOCCs through special charters.
• The PNRC enjoys a special status as an important ally and auxiliary of the government in the humanitarian field in accordance with its commitments under international law.
• Obviously, LWDs are not private corporations because they are not created under the Corporation Code.
• Sole proprietorship is not recommended for high risk enterprises because it puts the owner’s personal assets at risk, especially if he/she is taking on a significant amount of debt for the business.
• The burden of work in a partnership is shared among the partners, creating synergy within the company that enables individual contributions to have a greater outcome.
• A partner in a partnership cannot be transferred to another without the consent of the other partners.
• Internal stakeholders are those who are 'members' of the business organization, including owners, managers, staff, and employees.
• In a partnership, there is no power of succession, the death of a general partner causes the dissolution of the partnership.
• External stakeholders are not part of the firm.
• A sole proprietor is subjected to minimum legal requirements and capital, making it relatively easy and convenient to form and close this type of business.
• A partnership can hold assets and incur debts in its name.
• Management is to govern.
• A corporation is an entity that is legally recognized as separate and distinct from its owner, like a person, it can own, buy, and sell things, enter into a contract, sue other persons or businesses, and be sued by them.
• A partner in a partnership is considered an agent of the partnership, therefore there is a risk of loss due to the incompetence and or fraud of other partners.
• Customers in a business buy the goods or services produced by the firm, and may be individuals or other businesses.
• To or more individuals come together, contribute resources to form a business, and agree to divide the profit among them, a partnership is formed.
• The local community may often provide many of the firm’s staff and customers, and the business often supplies goods and services vital to the local area.
• A corporation is an artificial being, created by operation of law, and enjoys the right of succession.
• Compared to sole proprietorship, partnership has less taxation burden.
• Suppliers in a business get the resources they need to produce goods and services from suppliers, and businesses should have effective relationships with their suppliers in order to get quality resources at reasonable prices.
• Partnership is ideal for businesses that require a significant amount of capital and collective resources.
• Owners and shareholders in a business may have different roles and levels of responsibility according to the size of the firm, from sole trader to large corporation.
• Sole proprietorship is ideal for small enterprises that service the surrounding neighbourhood, such as sari-sari stores, barbershop, and water stations.