FORM OF BUSINESS OWNERSHIP FORMATION/REGISTRATION

ORGANIZATION
1. SOLE PROPRIETORSHIP ONE INDIVIDUAL REGISTERED WITH THE DTI
2. PARTNERSHIP MORE THAN ONE FORM BY CONTRACTUAL
AGREEMENT

REGISTERED WITH THE SEC

3. CORPORATION OLD CORPO CODE:
INCEPTION/INCORPORATION FORMED BY OPERATION BY LAW
 5-15
EXISTING REGISTERED WITH THE SEC
 MORE THAN ONE
REVISED CORPO CODE
 ONE OR MORE

4. COOPERATIVE MORE THAN ONE MEMBERS FORMED IN ACCORDANCE WITH

THE COOPERATIVE CODE

REGISTERED WITH THE CDA

FORMS OF BUSINESS ORGANIZATION

ADVANTAGES AND DISADVANTAGES

SOLE PROPRIETORSHIP
ADVANTAGES
 You are the boss and you keep all the profits
 Decision making is simple because you have
complete control over the business.
 Relatively easier and less costly to form
business requirements
 Lower extend of Government Regulation and
relatively lower taxes
DISADVANTAGES
 You assumed all the risk of loss
 You take all responsibility and rely mostly on
yourself in making decisions.
 It is more difficult to raise capital because you
rely mostly on your personal assets and loans
to initially finance the business.
 You are personally liable for the debts and
obligations of the business

PARTNERSHIP
ADVANTAGES
 Better business decisions
 You share business risk and responsibilities
 Compared to Corporation
Partnership is easier to form
 Greater capital compared to a Sole
Proprietorship
 Relatively lower extend of government
regulation
DISADVANTAGES
 Making business decisions may give rise to
conflict among the partners
 You don’t keep all the profits
 Limited life
 Lesser capital compared to corporation
 A partnership is taxed like a corporation
 Unlimited liability

CORPORATION
ADVANTAGES DISADVANTAGES
 A stockholder who is not a member of board  Your “say” on corporate affairs depends on the
of directors relieved from managerial number of shares you owned
responsibilities
 Limited liability  Difficult and costly to form
 Greater capital and ease in raising capital  Greater extend of government regulation and
higher taxes
 Easily transfer your share to others  Wait for the dividend
 Unlimited life