DIFFERENT KINDS OF BUSINESS ORGANIZATIONS

 1. Sole Proprietorship
 2. Partnership
 3. Corporation
 4. Cooperative

DISTINCTIONS:
SOLE PARTNERSHIP CORPORATION COOPERATIVE
PROPRIETORSHIP
No. of Persons Only one person Two or more Minimum of At least fifteen
required to for persons five (5) but not (15) persons,
formation more than natural or
fifteen (15) juridical
natural persons
Grant of None (but business Upon Upon issuance Upon issuance
Juridical should be agreement of of Certificate of of Certificate of
Personality registered with the the parties Incorporation Registration by
DTI) by the SEC the CDA
Documentary Application form Articles of Articles of Articles of
Reqts for Partnership Incorporation, Cooperation,
Registration and by-laws By-laws, By-laws, Bonds,
Treasurer’s Economic
Affidavit Survey, and
Treasurer’s
Affidavit
Capitalization Only owners Partners At least 25% of Members
requirement contribute contribute the authorized contribute
contribution money, capital stock (limited to 10%
property or has been of the total
industry subscribed and subscribed
at least 25% of share capital)
the
subscriptions
have been paid
Management Owner decides Partners make Board of General
Structure collective Directors make Assembly make
decisions final decisions final decisions
Voting rights Not applicable Per head or Based on the One member,
based on number of one vote, no
interest shares held, proxy allowed
proxy voting
allowed
Liability Extends up to Extends up to Liability is Liability is
personal personal limited only up limited only up
properties of properties of to the to the
 owner partners after contribution of subscribed
exhaustion of the share capital
assets of stockholders.
partnership
(except for
limited
partners)
Taxability Income Tax of Partners pay Corporation Net-surplus not
owner tax on share pay tax, taxable,
from shareholders shareholders
partnership pay tax on pay tax on
profits dividends interest on
received share capital
received by
them
Effect of death End of business Partnership is Corporation has Cooperative
of owner, operations unless automatically the right of continues, heirs
partner, or heirs take over dissolved succession, become
shareholder heirs inherit members if
shares qualified
Transferability Allowed Partner cannot Shareholders Transferee
of interest transfer can transfer must be a
without the entire interest member or a
consent of all without the person qualified
other existing consent of the to be a member
partners other
shareholders
Motive for Profit Profit or Profit Profit and
existence service service
Laws which Civil Code on Civil Code Corporation Philippine
govern Contracts Code (BP Blg. Cooperative
68) Code of 2008
(RA 9520)