Corporations and One person Corporations E PROPRIETORSHIP, PARTNERSHIP ANDCorporation DEFINITION: Corporation isan association of individuals organized under a charter granted by the state. Itis in a sense an artificial person created by the law. san independent legal entity, it may have perpetual life hold property, conduct business and enter into contracts, sue and be sued. it has the right to buy to sel, own, manage, mortgage and otherwise dispose of real and personal property.CORPORATION IN NUMBERS Although proprietorships are many in number, they are generally small in size. in comparison, corporations are few in rumber, but generally large in size Because corporations tend to be large, they play a powerful role inthis country and in others. For example, corporations employ millions of people and provide consumers with many of the goods and services they need and want. Partnerships 6% Corporations 1956 Sole propietrsips 75% Number of businesses Partnerships 8% Sole propitorships 5% Corporations 87%FORMATION OF CORPORATION “The Corporation Code “Revised Corporation of the Philippines" Code of the Philippines” BATAS PAMBANSA BILANG 68 REPUBLIC ACT NO. 11282 2018 Any person, partnership, association or corporation, singly or jointly with others but not more than fifteen (15) in number, may organize a corporation for any lauful purpose or purposes A corporation witha single stoctholder is considered a One Person Corporation.FORMATION OF CORPORATION Requirements in the Registration Process Government Agencies Involved in the Registration Process: + SEC Certificate of Registration + Securities and Exchange Commission (SEC) (forthe creation of juridical entity of the corporation) « Articles of Incorporation; y Laws + Bureau of internal Revenue (BIR) (for corporate taxation) reasurers Affidavit; and « Joint affidavit of two incorporators + Local Government Urits (LGUs) of the location where you want to establish your business + Barangay Clearance + Business Permit + Hremploying individuals, a corporation should register with + Certificate of Registration (BIR Form 2303) some government agenciesCLASSES OF CORPORATION Stock Corporation ~ a corporation with capital stock Non-Stock Corporation - a corporation that neither divided into shares and authorized to distribute to the generates profit nor issues shares of stock to its members, holders of such shares, dividends or allotments the profits of and could have any of the following purposes the business based on equity of shares Charitable; eligious; « Educational; Cultural ivie service; and Other similar purposes, such as chambers or combinations trade, industry or agriculture + Domestic Corporation + Foreign Corporationtay ao beled CEO (het OWNERSHIP AND STOCK Corporations are owned by sharaholders who invest money in the business by buying shares of stock. The portion of the corporation they own depends on the percentage of stock they hol. the shareholders elect a board of directors, a group of people (primarily from outside the corporation) who axe legally responsible for governing the corporation the board oversees the major policies and decisions made by the corporation, sets goals and holds management accountable for achieving them, and hires and evaluates the top executive, generally called the CEO (chief executive officerOne Person Corporation DEFINITION ‘A One Person Corporation is a corporation with a single stockholder: Provided, That only a natural person, trust, or an estate may form a One Person Corporation STRUCTURE. The single stockholder shall be the sole director and president of the One Parson Corporation The single stockholder may not be appointed as the corporate secretaryBENEFITS OF INCORPORATION ‘The corporate form of organization offers several advantages, including limited lability for shareholders, greater access to financial resources, specialized management, and contioily. Limited Liblty Financial Resources Specialized Management Continuity and Transferability DRAWBACKS TO. INCORPORATION Like sole propristorships and partnerships, corporations have both positive and negative properties. Segregation of management and ownership Discourages small businesses Complete absence of close personal and community relationships