Instituto Marista La Inmaculada

Synonyms:
Enterprises
Firm
Business
Corporation
Establishment
Agency
Office
Bureau
Institution
Organization
 Instituto Marista La Inmaculada

Enterprise
A voluntary association formed and organized to carry on a business. Its main
objective is to create, produce and offer products or services to improve the
quality of people’s life.

Types of enterprises
They are classified according to the following characteristics:
A. Size
B. Activities
C. Amount of owners
 Instituto Marista La Inmaculada

Companies by Size
A sub-classification is created in this aspect:
1. Financial status: according to the invested capital, it could be large, medium
or small.
2. Number of employees: it is large when it has more than 1,000 employees;
medium if it has among 250 and 1,000 employees; and small if it has less than
250 employees.
3. Productivity: it is large if it uses technology and complex systems to produce
high levels of production. If it has more machines and less handmade work, it
is medium. Finally when it has a lot of handmade workers with one only
employer, it is small.
4. Sales: large when it sells internationally, medium when they are nationally,
and small if they are only locals.
 Instituto Marista La Inmaculada

Companies by Activities
1. Industrial: when raw material is processed and modified to create products.
2. Commercial: when selling or buying the products.
3. Agriculture and livestock: plants and cattle.
4. Service: selling services to the community by using employees’ abilities and
knowledge.

Companies by Number of Owners

For creating a company, material, administrative and financial means are needed.
Only when owners invest the capital, a company can work.
 Instituto Marista La Inmaculada
Business Structure
A. Sole Proprietorship: A business that legally has no separate existence from its owner.
Income and losses are taxed on the individual's personal income tax return.
The advantages of a sole proprietorship include:
• Owners can establish a sole proprietorship instantly, easily and inexpensively.
• Sole proprietorships carry little, if any, ongoing formalities.
• Owners may freely mix business or personal assets.
The disadvantages of a sole proprietorship include:
• Owners are subject to unlimited personal liability for the debts, losses and liabilities of the
business.
• Owners cannot raise capital by selling an interest in the business.
• Sole proprietorships rarely survive the death or incapacity of their owners and so do not
retain value.
 Instituto Marista La Inmaculada

Business Structure
B. General Partnership

A General Partnership is composed of 2 or more persons (usually not a married couple)

who agree to contribute money, labor, or skill to a business. Each partner shares the
profits, losses, and management of the business, and each partner is personally and
equally liable for debts of the partnership. Formal terms of the partnership are usually
contained in a written partnership agreement.
 Instituto Marista La Inmaculada
Business Structure
C. Limited Liability Partnership: A business organization that allows limited partners to
enjoy limited personal liability while general partners have unlimited personal liability.

A limited partnership is similar to a general partnership except that it has two classes of
partners. The general partner(s) have full management and control of the partnership
business but also accept full personal responsibility for partnership liabilities. Limited
partners have no personal liability beyond their investment in the partnership interest.
Limited partners cannot participate in the general management and daily operations of the
partnership business without being considered general partners in the eyes of the law.
 Instituto Marista La Inmaculada

Business Structure
D. Corporation

Definition: A form of business operation that declares the business as a separate, legal
entity guided by a group of officers known as the board of directors.

Corporations, if properly formed, capitalized and operated (including appropriate

annual meetings of shareholders and directors) limit the liability of their shareholders.
Even if the corporation is not successful or is held liable for damages in a lawsuit, the
most a shareholder can lose is his or her investment in the stock. The shareholder's
personal assets are not on the line for corporate liabilities.
 Instituto Marista La Inmaculada

Business Structure
E. Nonprofit Corporation

Definition: A business organization that serves some public purpose and therefore
enjoys special treatment under the law. Nonprofit corporations, contrary to their name,
can make a profit but can't be designed primarily for profit-making.