Forms of Business Organization

• How many business owners are there in Sole Proprietorship?

  1
• Sole Proprietorship is a form of business organization that is the least costly and easy to set-up. It is usually small in operations and resources.
• In Sole Proprietorship, the owner has unlimited liabilities.
• The 2nd process in organization of business is Barangay's Office.

  • business location is registered
  • the owner acquires a Barangay Certificate of Business Registration and Clearance.
• The 3rd process in organization of business is Mayor's Office.

  • The owner acquires the Mayor's (Business) Permit
• The 1st process in organization of Sole Proprietirship is Department of Trade and Industry (DTI).

  • business name is registered
  • the owner acquires a Certificate of Registration (renewable every 5 years).
• The 4th process in organization of business is Bureau of Internal Revenue (BIR).

  • the owner acquires certificate of registration / BIR Form 2303.
• The 5th and last process of organization of business is to register in SSS, Philhealth, and Pag-IBIG funds for the employees.
• Partnership is a contract whereby 2 or more persons bind themselves to contribute money, property, and industry into a common fund.
• Owners of a partnership are called "partners".
• Partners have the intention of dividing profits among themselves.
• It is the characteristic of partnerships wherein each partners have power and ability to enter the partnership in business contracts.

  Mutual Agency
• To whom is unlimited liability only applicable in partnerships?

  General Partners
• Partnerships have limited life. Once a partner withdraws, the company has to close and finalize its income statements and balance sheets.
• Partners must have mutual participation in profits. All partners shall have a share in profits.
• It is the characteristic of partnerships wherein the business name must include all the names of the partners. Example: Reese and Elaine Carwash

  Legal Entity
• Co-ownership of contributed assets in Partnership means the partners jointly owns the assets contributed by

  a partner.
• In income tax of partnership, some of the taxable incomes are set aside for the next accounting year.
• It is a type of partner in which its contributions are money or property with equivalent value.

  Capitalist
• It is a type of partner in which it contributes its skills or expertise and is automatic a limited partner.

  Industrial
• It is another type of partner in which it has unlimited liabilities (liability is extended up to their personal assets).

  General Partners
• It is another type of partner in which its liability is only within its contributions.

  Limited Partners
• A type of partnership that buys and sells tangible products.

  Trading
• A type of partnership that offers intangible services.

  Non-Trading
• Another type of partnership wherein all partners are General Partners.

  General Partnership
• Another type of partnership where there is atleast 1 General Partner.

  Limited Partnership
• In Limited Partnership, "Ltd" is included in the last part of the business name.
• A Corporation exists primarily to gain wealth/profit. It is an aritificial being created by operation of law.
• A Corporation is formed by what number of incorporators?

  5-15
• By 'artificial being,' what personality does a Corporation have considering that it acts like a person but not a person?

  Juridical Personality
• Unlike Sole Proprietorship and Partnership, a Corporation has unlimited life as it has the right of succession.
• In Corporation, it has the characteristic of Seperate Legal Entity because of it being an artificial being.
• Corporation is a creation by operation of law. It is dictated by existing legal principles.
• In Corporation, the right of succession is determined by whom has the largest share of stocks.
• Corporation's power, attributes, and properties are authorized by law.
• Ownership of Corporation is divided into shares. The portion of the corporation the incorporators own depends on the percentage of shares they hold.
• A corporation has board of directors elected by shareholders.
• Stock Corporation is a type of Corporation that is intended for profit and that is returned into dividends (share of stockholders). It is authorized to issue stock to the members as evidence of their interest and ownership.
• Non-Stock Corporation is not intended for profit and this is not distributed to the members. It is not authorized to issue shares of stocks to the members.
• A Corporation that is govern or ran by the government.

  Public Corporation