This document discusses different forms of business organizations including sole proprietorships, partnerships, corporations, and cooperatives. It provides details on organizing each type of business, their advantages and disadvantages, as well as classifications of corporations based on factors like capital structure, purpose, and ownership. The key forms of business organization covered are sole proprietorships, which are owned by a single person; partnerships, which are associations of two or more people; and corporations, which are owned by shareholders and have a legal entity separate from its owners.
This document discusses different forms of business organizations including sole proprietorships, partnerships, corporations, and cooperatives. It provides details on organizing each type of business, their advantages and disadvantages, as well as classifications of corporations based on factors like capital structure, purpose, and ownership. The key forms of business organization covered are sole proprietorships, which are owned by a single person; partnerships, which are associations of two or more people; and corporations, which are owned by shareholders and have a legal entity separate from its owners.
This document discusses different forms of business organizations including sole proprietorships, partnerships, corporations, and cooperatives. It provides details on organizing each type of business, their advantages and disadvantages, as well as classifications of corporations based on factors like capital structure, purpose, and ownership. The key forms of business organization covered are sole proprietorships, which are owned by a single person; partnerships, which are associations of two or more people; and corporations, which are owned by shareholders and have a legal entity separate from its owners.
in the economy and the main goal is to attract customers, and consequently earn profit Business provide for needs, wants and demands of the economy Factors in improving the business operation 1. Businesses pay taxes to the govt 2. Government provides the proper infrastructures Proper Infrastructures: electricity, water, roads, highways, communication, railways Forms Forms of Business Enterprises 1. Single/Sole Proprietorship form of business owned by a single person, known as the proprietor easiest enterprise to set up 4 Organizing: register the business name in DTI, pay municipal licenses to LG, apply VAT/non-VAT number, register w/ BIR the books of accounts 5 Advantages: easy to organize, few business requirements, single proprietor is the boss, all freedom in decision-making and all choices are made by him. 6 Disadvantages: limited liability to raise capital, sole proprietor has unlimited liability, limited to expand, business is entirely responsibility of the owner 2. Partnership Business organization that is association of at least 2 or more persons who agree to place money, property, or industry in a common fund with the aim of sharing profits among themselves Partnership agreement can be oral/ written although Phil. Requires a written agreement when real property/limited partnership are involved 6 Organizing: register the business name in DTI, have partnership agreement (articles in co-partnership) notarized and
registered w/ sec, obtain TIN for the
partnership from BIR, obtain municipal licenses from LG, obtain VAT/non-VAT, register books of accounts and bus. Forms to be used Contents of Articles of Copartnership: name of partnership and partners, place of business, effective date of partnership, nature of business, investment of each partner and corr. Capital credit, duration of contract, rights, power and duties of partners, accounting period, manner of P/L, liabilities of partners from partnership debts, compensation for services offed by owners, treatment of partners addl investments and withdrawals, procedures for dissolution, provision for settlement disputes Types of Partners Based on contribution Capital partner provides assets, such as money and property to be utilized as the standing capital of the business Industrial partner swears to give services/labor to the operation of the business and hands-on partner in the business Capitalist-industrial partner one that pledges money and property as the staring capital of the business, as well as his services Based on liability General partner liable for partnership problems, particularly debts and his liability for business debts extends to his personal property after partnership assets are exhausted Limited partner whose liability for partnership problems is limited and his only limited is to the extent of his capital contribution 5 Advantages Easy to form Flexibility of operations Efficiency in operations
Partners are expected to have
great interest in the operation of the partnership Possibility of bigger resources 4 Disadvantages Partners have unlimited liability for partnership debts Limited life or lacks stability Limited ability to raise capital Conflicts among partners 3. Corporation A corporation is 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 (Corp. Code of the Phil. Batas Blg. 68) Corporation form of business org. in w/c the owners (stockholder) have undivided ownership share in assets of the corporation upon its dissolution and share profits corresponding to the amt. of shares of stocks w/c they own has specific objectives in carrying out the business, accordance w/ charter or articles of incorporation Charter is a written document containing the names of the original incorporators, their initial share in stockownership, and the objectives and activities of the corporation Organizing: verification of corporate naming w/ SEC, drafting and execution of AOI, deposit of cash received for subscribed shares of stock, filling of AOI together with the ff: treasurers affidavit, statement of assets & libalities of proposed corp, authorithy ot verify bank deposit, certificate of deposit of cash paid, personal info sheet of incorporators., payment of filling & publication fees, issuance by SEC of the certificate of incorporation, register corporate name in DTI, obtaining municipal licenses, VAT/nonVAT acct from BIR, and register books of accounts and accountable forms By-Laws defined as the rules of action for the internal govt of a corporation and
for a government of its officers,
stockholders and members *All corporations formed under the Corporation Code of the Philippines are require to adopt a code of by-laws w/in 1 month after its corporate charter from SEC. It shall effective only upon the issuance by SEC of certification that bylaws are not inconsistent w/ provision of the Corporation Code Rights of Stockholder To attend and vote in person or by proxy at stockholders meeting To receive dividends when declared To inspect corporate books and record and to receive financial reports of corporations operations To pre-emption in the issue of shares To elect and remove directors To approve certain corporate acts To issuance of certificate of stock To transfer of stock on corporate books To adopt and amend or cancel the by-laws To enter voting trust agreement 7 Advantages: 1. it has a legal capacity 2. it has continued and more or less permanent existence 3. management is centralized 4. it has the most efficient management 5. shareholders have limited liability 6. shareholders freedom 7. ability to raise more capital 7 Disadvantages 1. Complicated to maintain & easy to organize 2. Govt intervention 3. Subject to higher tax 4. It has limited powers 5. Abuses of corporation officials 6. Some corporation officials 7. There is a very impersonal or formal relationship between the officers Classification 1. Based on nature of its capital
Stock the capital is in the form of
shares of stock Non-Stock open to all interested and theres no dividend among its members and trustees 2. Based on purpose Public owned, formed, and organized by the govt Private owned, formed and organized by private owners or businesses 3. Based on relation to another corp. Parent controlling interest on another corp. so that it has the power either, directly or indirectly to elect the majority of the directors of such other corporation Subsidiary the investor corp. in w/c the parent corp. has the controlling interest 4. Based on situs of incorporation Domestic created under Philippine Law Foreign formed, organized or existing under the laws of another country 5. Based on whether they want to open in public or not Close limited to selected persons or members of a family Open open to any person who may wish to become a stockholder or member thereof Voting: Stock Corporation Cumulative Voting the manner of voting where a stockholder is entitled to cast votes equal to the number of shares he owns multiplied by no. of shares he owns multiplied by no. of directors to be elected Non-stock Corporation Every member may cast as many votes as there are trustees to be elected but may not cast more than 1 vote for 1 candidate, uncles cumulative voting is authorized under AOI Categories of Share of Stocks 1. Common Stock represents the basic issue of shares and has all the basic rights of stock 2. Preferred Stock having certain preferences over common stock 3. Class A share available stocks offered to a Filipino shareholders
4. Class B share available stocks offered
to foreign investors 5. Par Value Shares shares of capital stock that have been a definite or fixed value in AOI ; has a minimum subscription or original issue price 6. No par value shares not have been assigned a definite or fixed value 7. Founders shares may be given certain rights and privileges not enjoyed by other stockholders and usually given to incorporators formators of the corporation Dividends called as the distributed profits of the corporation; represents the corporations profit Kinds of Dividend 1. Cash paid in cash to the stockholders 2. Property in the form of noncash assets of corporation 3. Stock dividend in the form of stocks issuing corporation 4. Scrip dividend in the form of promissory notes indicating the kind of benefits the stockholders shall be entitled to receive in the future 5. Bond form of bonds in the company 6. Liquidating refers to return of capital by a corporation 4. Cooperative Only organization composed primarily of small producers and consumers who voluntarily join together to form business enterprises which they themselves own, control and patronize Principles 1. Open and voluntary memebership 2. Democratic control 3. Limited interest capital 4. Division of net surplus 5. Cooperative education 6. Cooperation among cooperatives Similarities in corporation *Factors of production are privately owned and managed *Depend on business efficiency to survive in competitive market
*Regulated and supervised by govt *enjoy a
reasonable degree of economic growth Differences in corporation Cooperative Corporation Primarily organized Purpose is mainly for service for profit Membership is open Restricted and voluntary One man-one vote One share, one with no proxy vote, and more
voting
Savings or net profits are refunded to the members
share more votes,
and can be by proxy Profits are distributed to stockholders on the basis of no. of shares