Professional Documents
Culture Documents
Bus - Ethics - q3 - Mod1 - The Nature and Forms of Business Organizations - Final
Bus - Ethics - q3 - Mod1 - The Nature and Forms of Business Organizations - Final
Social Responsibility
Quarter 3 – Module 1: The
Nature and Forms of Business
Organizations
Business Ethics and Social Responsibility – Grade 12
Alternative Delivery Mode
Quarter 3 – Module 1: The Nature and Forms of Business Organizations
First Edition, 2020
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Team Leaders:
School Head : Reynaldo B. Visda
LRMDS Coordinator : Melbourne L. Salonga
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
This lesson was designed and written in the hope to produce young
entrepreneurs. This will help you understand what the nature of business is, as well
as its forms. It is also explained in a way that could easily be understood by Senior
High School students who, at the end of this module are expected to:
1. define business;
2. explain why people engage in business;
3. give the advantages and disadvantages of each form of business
organizations;
4. create their own business and logo; and
5. classify the given characteristics of organizations.
1
What I Know
Directions: Analyze each sentence below and write whether it is True or False. Write
your answers on a separate sheet of paper.
2
Lesson
The Nature and Forms of
1 Business Organizations
What’s In
Directions: Arrange the following jumbled letters to form the correct words as
described by the given clues. Write your answers on a separate sheet of paper.
3
What’s New
Answer:
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
4
What is It
Most businesses aim to earn profit. The term profit refers to the difference
between the amount received and the amount spent on something purchased,
produced, or manufactured. The fundamental reason for examining business
activities from a moral point of view is that business organizations should, in
principle, help promote the common good and protect the rights and interests of
individuals.
Manufacturing businesses turn basic inputs into products which are sold to
consumers.
Examples: shoe manufacturing, baked goods, candle manufacturing,
cosmetics manufacturing, wine production, etc.
5
Forms of Business Organizations
1. Sole Proprietorship- It is a one-person business. The owner has full control over
the finances and operations and decides alone.
Advantages:
a. Tax preparation is faster. Simply file an individual income tax return including
losses and profits to your business. Your personal and business income is
considered the same and the tax implications for self-employed individuals
would apply.
b. Sole proprietorship has lower start-up costs.
c. Handling money for the business is easier.
d. Sole proprietorships have the least government rules and regulations that
affect them.
e. The sole proprietor can own the business for as long as he/she wants, and
when he/she wants to move out, he/she can cash in and sell the business.
f. Even in common practice, the sole proprietor can pass the business down to
his/her heir.
Disadvantages:
a. The sole proprietor is personally liable for all debts and actions of the
enterprise.
b. There is lack of financial control because of looser structure of sole
proprietorship.
c. There could be difficulty in raising capital.
Advantages:
a. Partnership business lacks formality as compared with managing a limited
company or corporation.
b. It is easy to start. The partnership may be created either verbally or in writing.
c. You share the burden. You have companion and support.
d. Every partner would add his/her own expertise, skills, experience, and
connections to the business, thus giving it a greater chance of success.
e. There is better decision-making. Two heads are better than one.
f. There is privacy. The business deals may be kept confidential by the partners.
g. The partners own and control the business.
h. The more partners there are, the more funds are available in the company,
which can be used for possible expansion. Its borrowing capacity is also likely
to be higher.
i. There is an easy access to profits in a business partnership. The partners just
have to divide the profits.
6
Disadvantages:
a. The business does not have any independent legal status.
b. The business has no separate legal personality, so the partners are personally
liable for the debts and losses incurred.
c. The partnership business often seems to lack the sense of prestige more
closely associated with a corporation.
d. A partnership will often find it more difficult to raise money than a corporation.
e. There is a potential of differences and conflicts.
f. Decision-making can be slower because there is a need for consultation
among partners.
g. The profit must be shared among the partners.
h. It may require a lot of time and energy thus may affect life-work balance.
i. The profits earned by the partnership will be translated to income on the
individual partners. Thus, they are subject to income tax in the financial year
in which they are made.
j. There are limits on business development like unlimited liability, lack of
funding opportunities, and a lack of commercial status, etc.
Advantages:
a. The liability of the shareholders of a corporation is limited up to the amount
of their investments.
b. A publicly held corporation may sell shares or issue bonds to raise substantial
amounts.
c. It is easy for a shareholder to sell shares in a corporation.
d. A corporation’s life has no limit, ownership can pass through many
generations.
Disadvantages:
a. The corporation pays taxes on its income depending on its type and the
shareholders pay dividend taxes, so income gets taxed twice.
b. The management team of a corporation can operate the business without any
real oversight from the owners.
7
What’s More
B. Directions: Supply the appropriate information on the table. Copy the table
and write your answers on a separate sheet of paper.
a. Sole Proprietorship
Advantages Disadvantages
1. 1.
2. 2.
3. 3.
b. Partnership
Advantages Disadvantages
1. 1.
2. 2.
3. 3.
c. Corporation
Advantages Disadvantages
1. 1.
2. 2.
8
What I Have Learned
9
What I Can Do
Directions: Share your insights on the situation below. Write your answers on a
separate sheet of paper.
A rich relative of yours tells you that he/she is willing to lend you one million
pesos without any interest and ask you to start a business. What kind of enterprise
do you prefer? Describe it briefly.
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
Directions: Create your business logo. Use a separate sheet of paper for your
drawing.
Rubrics:
10
Assessment
A. Directions: Analyze each sentence below and write whether it is True or False.
Write your answers on a separate sheet of paper.
A B
6. Corporation A. It is a business owned by one person only.
7. Sole proprietorship B. It is the amount received minus the amount
spent.
8. Business C. It is an independent entity distinct from its
owners.
9. Partnership D. It involves important operations like
advertising, marketing, etc.
10. Profit E. It is a business venture by two or more people.
C. Directions: Read each sentence and write the letter of your answer on a
separate sheet of paper.
11
13. Which is not a nature of business?
A. It aims to earn profits.
B. There are four forms of business organization.
C. It is an active process.
D. It involves significant operations such as buying, assembling, etc.
2
Additional Activities
Directions: Answer the questions in three to five sentences. Write your answers on a
separate sheet of paper.
Dantes, Edmond. 2020. Man in Black Long Sleeve Shirt Sitting in Brown Couch
[Image]. Retrieved from https://www.pexels.com/photo/man-woman-desk-
office-4342127/.
Fauxels. 2019. Photo of People Near Wooden Table [Image]. Retrieved from
https://www.pexels.com/photo/photo-of-people-near-wooden-table-
3184418/.
Magni, Oleg. 2019. Photo of Two People Shake Hands [Image]. Retrieved from
https://www.pexels.com/photo/photo-of-two-people-shakehands-
2058130/.
Racelis, Aliza. 2017. Business Ethics and Social Responsibility. Manila: Rex Book
Store, Inc.
Roa, Floriano. 2011. Business Ethics and Social Responsibility. Manila: Rex Book
Store, Inc.
Start-up Stock Photos. 2015. Woman Sitting in Front of Macbook Inside Room
[Image]. Retrieved from https://www.pexels.com/photo/woman-person-
macbook-laptop-7355/.
For inquiries or feedback, please write or call: