Masterand : Pavi Antoni D.

Villaceran
Subject : Entrepreneurship
Professor : Mauro Allan Amparado, RN, MBA, MAN,
Ph.d
Topic : New Venture and the Law

Objectives:
At the end of the discussion, masterands will be able to
1. Understand the concept about New Venture
2. Illustrate the Law regarding New Venture

1. Entrepreneurship - Is an art of observing correct practices in

managing and operating a self-owned, wealth creating business
enterprise by providing goods and services that are valuable to the
customers and its a risk taking venture

2. Entrepreneurship is vital source of employment and growth. In

the Philippines, Entrepreneurship follow the flow of Entrepreneurial
Benefits
In the given diagram, the first party to receive the benefits of
entrepreneurship is the Filipino people, which is transferred to
or shared with the local community and goes to the Philippine
Economy and flowed back.

3. TYPES OF BUSINESS VENTURE -When an entrepreneur

decides to start a new business, he or she must choose among
a variety of business entities. The most common types include a
sole proprietorship, partnership, corporation, and limited
liability company. They range from easiest to most difficult to
start and maintain. Each entity has a specific taxation method,
management organization, and liability structure. Among the
business entities, proprietorships and partnerships typically
have the least protection, while corporations and limited
liability companies have more. Listed below are some types of
business ventures in the Philippines;
a) Sole Proprietorship
b) Partnership
c) Corporation
d) Stock or Non Stock Corporation
4. SOLE PROPRIETORSHIP - This is a business run by one
individual for his or her own benefit. It is the simplest form of
business organization. Proprietorships have no existence apart
from the owners. The liabilities associated with the business
are the personal liabilities of the owner, and the business
terminates upon the proprietor's death. The proprietor
undertakes the risks of the business to the extent of his/her
assets, whether used in the business or personally owned.

5. PARTNERSHIP- A general partnership is an agreement,

expressed or implied, between two or more persons who join
together to carry on a business venture for profit. Each partner
contributes money, property, labor, or skill; each shares in the
profits and losses of the business; and each has unlimited
personal liability for the debts of the business.

Limited partnerships limit the personal liability of individual

partners for the debts of the business according to the amount
they have invested. Partners must file a certificate of limited
partnership
Under the Civil Code of the Philippines, a partnership is
treated as juridical person, having a separate legal personality
from that of its members. Partnerships may either be general
partnerships, where the partners have unlimited liability for the
debts and obligation of the partnership, or limited partnerships,
where one or more general partners have unlimited liability
and the limited partners have liability only up to the amount of
their capital contributions. It consists of two or more partners.
A partnership with more than Peso 3,000 capital must register
with the Securities and Exchange Commission (SEC).
Partnership

JOINT VENTURE VS. PARTNERSHIP

Joint Venture - involves more than one investor for only a
specific short-term project an prompt division of profits.
Difference between Debt Financing and Equity investors
 Debt and equity financing are two very different ways of
financing your business.
 Debt involves borrowing money directly, whereas equity
means selling a stake in your company in the hopes of
securing financial backing.
 Both have pros and cons, and many businesses choose to
use a combination of the two financing solutions.

6. CORPORATION- is composed of juridical persons established

under the Corporation Code and regulated by the SEC with a
personality separate and distinct from that of its stockholders.
The liability of the shareholders of a corporation is limited to
the amount of their share capital. It consists of at least five to
15 incorporators, each of whom must hold at least one share
and must be registered with the SEC. Minimum paid up capital
is Php 5000.00. A corporation can either be stock or non- stock
company regardless of nationality. Such company, if 60%
Filipino- 40% Foreign - owned is considered a Filipino
Corporation. If more than 40% Foreign-owned, it is considered
a domestic foreign-owned corporation.

7. STOCK CORPORATION - is a corporation with capital stock

divided into shares and authorized to distribute to the holders
of such shares dividends or allotments of the surplus profits on
the basis of the shares held.

8. NON-STOCK CORPORATION -is a corporation organized

principally for public purposes such as charitable, educational,
cultural, or similar purposes and does not issue shares of stock
to its members.

9. LEGAL ISSUES RELATED TO ENTREPRENEURSHIP - Patent,

Trademark, Servicemarks and Trade Name, Copyright.

PATENT - is a set of exclusive rights granted by a sovereign

state to an inventor or their assignee for a limited period of
time, in exchange for the public disclosure of the invention. An
invention is a solution to a specific technological problem, and
may be a product or a process. Patents are a form of
intellectual property.

10.PATENTABLE MATTERS - Any technical solution of a

problem in any field of human activity which is new, involves an
inventive step and is industrially applicable shall be Patentable.
It may be, or may relate to a product or process, or an
improvement of any of the foregoing.

11.NONPATENTABLE INVENTIONS - The following shall be

excluded from patent protection
a) 22.1 Discoveries, scientific theories and mathematical
methods
b) 22.2 Schemes, rules and methods of performing mental
acts, playing games or doing business and programs for
computers
c) 22.3 Methods for treatment of the human or animal
body by surgery or therapy
d) 22.4 Plant varieties or animal breeds or essentially
biological process for the production of plants and
animals
e) 22. 5 Aesthetic Creations
f) 22.6 Anything which is contrary to public order or
morality

12.THE LAW ON TRADEMARKS IP CODE -Republic Act No. 8293

Trademarks - Section 121.1 Mark means any visible sign
capable of distinguishing the goods (trademark) or services
(service mark) of an enterprise and shall include a stamped or
marked container of goods

13.TRADENAME - means the name or designation identifying

or distinguishing an enterprise

The rights in a mark shall be acquired through registration

made validly in accordance with the provisions of this law. Sec
122.
The applicant or the registrant shall file a declaration of
actual use of the mark with evidence to that effect, as
prescribed by the regulations within three years from the filing
date of the application. Otherwise, the application shall be
refused or the mark shall be removed from the Register by the
Director Sect 124.2

14.COPYRIGHT PROTECTED WORKS-

1. Literary and artistic works are original intellectual
creations in the literary and artistic domain.

UNPROTECTED WORKS
1. Any idea
2. Procedure, system, method or operation
3. Concept
4. Principle
5. Discover

15. INTERNAL AND EXTERNAL SOURCES OF FUNDS OF YOUR

BUSINESS
- At whatever stage of growth you are in as an
entrepreneur, it is very important to explore all possible
sources of capital. When borrowing money or raising funds
from investors, you need to consider the three important
factors that could affect the viability of the financing
package, namely 1. Time Duration, 2. Interest Rate 3.
Management participation of the funds provider
 Some other references would include, commercial banks,
Small Business Administration, Angel Investors and Venture
Capitalists.

16.INDEPENDENT CONTRACTORS VS. EMPLOYEE

An independent contractor is a person, business, or

corporation that provides goods or services under a written
contract or a verbal agreement. Unlike employees,
independent contractors do not work regularly for an employer
but work as required, when they may be subject to law of
agency. Independent contractors are usually paid on a
freelance basis. Contractors often work through a limited
company or franchise, which they themselves own, or may
work through an umbrella company

17. HOW TO APPLY FOR COMMERCIAL BANK LOANDS

a) Business Plan
i. Character- will you do everything to pay the loan back
ii. Capacity - Access to other income
iii. Collateral - Cosign
iv. Conditions - Scan the Environment

18.BANK LOANS - If you plan to increase your working capital

requirements for your inventory, accounts receivables or
operating expense budget, Short term loan migh be
appropriate. It requires repayment within the next 12 months.

If you are looking at financing capital expenditures, a loan that

can be repaid over the longer period of time.

19.THINGS TO CONSIDER WHEN CHOOSING THE RIGHT

LOCATION FOR YOUR BUSINESS. Important issues to consider
when choosing a location for your business or business
positioning.
Some reference will suggests on the following, Demographics
or study your segmentation or the Market Identification
Process, Foot Traffic, Accessibility, Competition, Local
Ordinances, Visibility, Synergy,

Expert suggests, before you open a business, you need become

both entrepreneurial competent and business competent, that
is to study the business environment, both Micro and Macro
Environment.

20.DEMOGRAPHICS -you should study both prospective

customers and employees in the area. Observe if the
immediate community can provide your required customer
base, plus the talents you need for your business.

21.FOOT TRAFFIC - This issue is very important if you want to

go into retail. You may have to physically count the number of
people passing the area at different times of the day so you
may be able to plan out everything.

22. ENTREPRENEURIAL COMPETENT - a person who aspires to

become successful entrepreneur must fully understand and
apply the concepts and principles of entrepreneurship. He/She
must possess and internalize the character traits that are
common among successful entrepreneurs.

23.BUSINESS COMPETENT - The entrepreneur, therefore, must

properly combine the strengths in business resources, culture,
and structure in order that the venture can do business in the
industry environment.

24.NATURE OF ENTREPRENEURIAL VENTURE -an

entrepreneurial venture may also be classified according to its
nature. The term nature simply refers to whether the business
is simply selling a product, manufacturing a product or
rendering a service to customers.
The classifications of entrepreneurial venture according to its
nature are as follows.
1. Merchandising
2. Service
3. Manufacturing
4. Agriculture
5. Hybrid Business
6. Special Corporation

25.MERCHANDISING- Is engaged in the buying and selling of

products or goods. It does not alter the appearance of the
product purchased from the seller. The entrepreneur engaged
in a merchandising venture buys the product in a certain form
and sells it in the same form. There is no alteration made in
terms of physical appearance, mechanical parts or chemical
content.
26.SERVICE - this provides intangible goods or services to
customers. It usually generates profit by charging for labor or
other services rendered to consumers, government or other
companies
27.MANUFACTURING -this converts raw materials, labors and
overhead into finished products that are available for sale to
customers.

28.AGRICULTURE - is engaged in the production of agricultural

goods and animals. It may sell its products as raw materials or
finished goods.

29.HYBRID BUSINESS - possesses the characteristics and nature

o combined types of business entities. It is inherent in the
business to produce and sell goods and at the same time
provide services to customers.
SPECIAL CORPORATION - Types of business may include
cooperatives, joint ventures and non-profit organization.

Are you planning to enter into business and call yourself a

businessman or entrepreneur? That sounds great! But what do
you want to be… a proprietor, partner or stockholder? Do you
want to offer a service or sale tangible products? Before you
proceed, it is wise to consider first the different types and
forms of business, firm or enterprise that you may undertake.
You should carefully assess yourself, including your skills,
financial resources and team, to select the best kind of business
to start. To guide you, the following are the different types of
business in the Philippines you may need to consider.

30. ANGEL INVESTORS AND VENTURE CAPITALIST

Angel investors and venture capitalists are two types of

equity investors that are often on the lookout for startups with
the potential to grow rapidly but require a capital investment
to do so. These are often highly experienced, discerning
investors who won't throw money at just any project. Angel
investors are high net worth individuals who often have some
sort of relationship with the business founder, while venture
capitalists are seasoned private investors who seek out
promising startups.

To convince an angel or VC to invest, entrepreneurs need a

pro forma with solid financials, some semblance of a working
product or service, and a qualified management team. Angels
and VCs can be difficult to contact if they're not already in your
network, but incubator and accelerator programs often coach
startups on how to streamline their operations and get in front
of investors, and they may have internal networks to draw
from.