Professional Documents
Culture Documents
Ethics Reviewer
Ethics Reviewer
1. Sole Proprietorship
2. Partnership
3. Corporation
4. Cooperative
SOLE PROPRIETORSHIP
● A sole proprietorship is a business owned by only one person.
● It is the simplest A of business organization.
● It is easy to set-up and is the least costly among all forms of ownership.
● The sole proprietorship form is usually adopted by small business entities.
● It’s a business that has no separate existence from the owner, as all income and losses are taxed
against their personal income tax return.
● Compared to the other business organization methods, this option requires the fewest number of
documents to complete and file.
Advantage of Sole proprietorship
● Easy setup
● Full control
● You receive all of the profits
● Direct access to feedback
DisAdvantage of Sole proprietorship
● Unlimited liability
● Full responsibility
● High working capital demands
PARTNERSHIP
-owned by two or more persons who contribute resources into the entity.
- The partners divide the profits of the business among themselves.
- Its chief characteristics A: (a) association of individuals; (b) mutual agency; (c) limited life; (d)
unlimited liability; and (e) co-ownership of property.
- The association of individuals in a partnership may be based on as simple an act
as a handshake;
however, it is preferable to state the agreement in writing.
-A partnership is a legal entity for certain purposes.
- Net income of a partnership is not taxed as a separate entity.
- Mutual agency means that an act of any partner is binding on all other partners,
so long as the act appears to be appropriate for the partnership.
- Each partner has unlimited liability.
- Each partner is personally and individually liable for all partnership liabilities.
General Partnership
● A business owned by two or more people, with a maximum of 20 owners, who have agreed to
share all assets, liabilities, profits, and losses of a company.
● These partners carry unlimited liability, meaning their personal assets are on the line and can be
sued for the whole of the partnership’s business debts.
● Taxes, however, do not flow through the partnership, meaning the partners are responsible for
their own tax liabilities, including any earnings made from the partnership, on their personal
income taxes.
ADVANTAGES
● More partners, more capital
● Divided responsibility
● Greater business networks
● Tax advantages
DISADVANTAGES
● Unlimited liability
● Partners can disagree
● Profit is shared
TO FORM A GENERAL PARTNERSHIP, THERE ARE 3 SPECIFIC STANDARDS THAT
NEED TO BE MET. LET’S TAKE A LOOK AT THEM.
● The partnership needs to include two or more owners
● Each partner must be comfortable with unlimited liability
● Proof that the partnership exists via a formal partnership agreement
LIMITED PARTNERSHIP
● Establishing a limited partnership requires two or more individuals agreeing to start a business
where one or more of the partners are liable only for the amount they have invested.
● Clearly, what separates limited partnerships from other partnerships is that partners can limit their
liability.
● Limited partners, also known as silent partners, have a stake in the company but do not have the
ability to make management decisions.
● The remaining partners, known still as general partners, are responsible for day-to-day operations
and any financial obligations beyond their initial investment.
ADVANTAGES
● Share in profits and losses without needing to be involved in the business
● Limited personal financial risks for limited partners
● Taxed via your own income tax returns
● Easier to attract new investors
DISADVANTAGES
● General partner(s) fully liable
● Limited partner(s) can assume general partner liability if they become active in the business
● State taxes and fees
JOINT VENTURES
● arrangement between two or more (often established businesses) who have agreed to
combine their resources in order to accomplish a specific project.
● This arrangement remains valid until the completion of a project or a certain period elapse.
ADVANTAGE
● Increased capacity and access to resources
● Shared liability with parties
● Access to new markets
DISADVANTAGES
● Different visions for the joint venture
● Imbalanced inputs and outputs between parties
● Lack of communication could derail project
● An example of a joint venture is the collaboration between Alphabet (Google’s parent company)
and Fiat Chrysler Automobiles.
● In May of 2016, the two companies announced that they would be collaborating in an effort to
develop self-driving cars.
● While each could have certainly done this independently, both partners decided they had a greater
opportunity to achieve their goals by working collaboratively.
● With a joint venture, each party is responsible for the costs of the project and will be associated
with any profits or losses.
● It should be noted that while each partner is responsible for the joint venture’s expenses, these
costs remain separate from their and their partner’s other business interests.
BEFORE FORMING A JOINT VENTURE, IT’S IMPORTANT TO ANSWER THE
FOLLOWING QUESTIONS:
● How many parties will be involved? What specific, essential skill does each provide?
● What and how much is each party contributing? Who owns what?
● What is the scope of the joint venture (Where will you operate? What will you solve? How will
you accomplish this?)
● How will the joint venture be structured? Who is controlling and managing?
● How will we operate once we’ve accomplished our initial goals?
● Who will work for the joint venture?
CORPORATION
● A corporation is a business organization that has a separate legal personality from its owners.
● Ownership in a stock corporation is represented by shares of stock.
● The owners (stockholders) enjoy limited liability but have limited involvement in the company's
operations.
●The board of directors, an elected group from the stockholders, controls the activities of the
corporation.
● Shareholders are able to either sell or transfer their shares enabling the corporation to live in the
event of a cash out or death.
THE CHARACTERISTICS THAT DISTINGUISH A CORPORATION FROM
PROPRIETORSHIPS AND PARTNERSHIPS ARE:
TYPES OF COOPERATIVES
Most simply, cooperatives can be categorized by their purpose; their members procure from and/or
provide goods and services to the cooperative.
COOPERATIVES OPERATE IN A BROAD VARIETY OF INDUSTRIES, INCLUDING THE
FOLLOWING:
Agricultural cooperatives
- help producers assure markets and supplies, achieve economies of scale, and gain market power
through jointly marketing, bargaining, processing, and purchasing supplies and services.
Arts and Crafts cooperatives
- help artists and crafts persons maximize their earning potential and working conditions.
Business cooperatives
-are formed by businesses to purchase supplies or obtain services at a lower cost.
Child Care and Preschool cooperatives
-provide high-quality enrichment and educational programs for children and their families.
Credit Unions
-provide at-cost financial services to a wide cross-section of the population.
Custodial and cleaning services cooperatives
-create employment opportunities and provide the benefits of ownership for their worker-members.
Food cooperatives and buying clubs
-gain access to grocery products using a consumer-directed approach.
Hardware wholesaling cooperatives
-like other business cooperatives, allow independent businesses to be competitive by cutting expenses
and adding member services through joint purchasing and marketing.
Housing cooperatives
-offer ownership options for the countrymen from all income groups.
Insurance cooperatives
-operate much like retail cooperatives except that they provide insurance services instead of consumer
goods.
Student cooperatives
-are set up and run by students to meet specific needs.
Utility cooperatives
-provide utilities such as communication services, electricity, and water to their members.
Worker cooperatives
-create employment opportunities and provide the benefits of ownership to members.
● Louis Vuitton and BMW may seem like a strange partnership initially.
● However, they have several traits in common.
● They both promote travel, as Louis Vuitton is known for their elegant luggage lines.
● They both consider luxury to be important, and they're both popular brands that are known for
their high-quality products.
● BMW created a car named the BMW i8, and Louis Vuitton created a four-piece set of bags and
suitcases that seamlessly fit into the rear parcel shelf in the BMW.
● This partnership showed the shared values of technological innovation, creativity, and style.
SPOTIFY & UBER
● Spotify partnered with Uber because they both had the same goal of getting more users even
though they had different products.
● Uber riders can pick out a Spotify playlist to choose what they'll listen to during their ride.
● This helps both Spotify and Uber fans have a better experience during their ride in the car.
CORPORATION EXAMPLES
Corporation example includes General Motors Corporation or GMC an icon of American
craftsmanship, Apple Corporation as one of the famous tech companies, Amazon Corporation founded by
Jeff Bezos is the world’s leading eCommerce and innovation company, Domino’s Pizza is a global food
chain company delivering quality food worldwide
MICROSOFT
● Microsoft was started by Bill Gates in 1975 and built a software Windows.
●The Company went on to build Ms. Office – Ms. Word, Ms. Excel, Powerpoint, Outlook, and
much other software which are used on a day-to-day basis by professionals and almost every
Company.
● The Company is currently led by Satya Nadela and earned a revenue of ₱110 billion in 2018 with
revenue growth of 14.28%.
● The Companies founder Bill Gates and his spouse Melinda Gates are involved in many social
causes around the world through their foundation called Bill and Melinda Gates Foundation.
● They work to uplift people from poverty, hunger, health problems.
GOOGLE
● Google is a multinational tech company mainly known for its search engine.
● The Company is the biggest corporation in internet services with a web of its apps like the search
engine, Gmail, google maps, youtube, etc.
● It has varied products including advertising services, cloud computing, software, etc.
● The Company was founded by Sergey Brin and Larry Page in 1998.
MODULE 2
● Business organizations regardless of what form it is share common purpose and role in socio-
economic development, in principle they should help in the promotion of common good and in
the protection of persons’ rights and interest
Sole/Single Proprietorship
a. Create Job
● Probably the most important way in which a Sole owner helps improve an economy is through
the creation of jobs.
● Sole owner business organizations provide employment opportunities to less educated and
uneducated workers and help minimize unemployment problem in the society.
● They move quietly, offer jobs to few people.
● Employing people at each local business contributes to the success to the locality, as with the
wages they earn, people buy property, shop and invest freely in where they live.
● Small businesses also serve as training ground to workers before they can be hired to large
business organizations.
● For instance, Bakeries, cake shops, repair shops, law offices and dental services create jobs that
bring money for residents who then spend their wage at other local businesses which develop the
local economy.
b. Help Small Producers
● Most of the goods sold by sole owners are purchased locally from local producers, thus local
producers are benefited by sole owners.
● Typically, it offers a larger number of locally produced goods compared to larger, national, or
global chains.
● A large amount of money spent at local business stays in the locality.
● This is a distinct benefit for the other local business, families, and workers in the area.
c. Provide Investment Avenues
● Sole owner organization provides a chance for small investors who has small amount of capital to
utilize their savings to engage new business.
● Anybody can start their own business as long as they have capital.
● Small business can give an individual a chance to gain experience, which the person may use
later a larger scale.
● For instance, an accountant can start a small business in the comfort of her own home, using the
laptop and internet connection she already has without paying a lease for space, then gradually
add staff as they grow
d. Help Consumers
● Sole owners deliver the merchandise to consumers at their doorsteps.
● So, time and energy of the consumers are saved. They offer convenience to buyers wherein
buyers can easily purchase products.
● For instance, Online selling, Customers can purchase what goods/products they need and want
quickly and efficiently at their convenience. if someone needs a product, they can easily order it
and delivered.
E. Supply Quality Goods
● Sole owners sell goods of high quality to maintain their reputation, thus accepting return of
defective merchandise. This ensures the safety and welfare of the public.
● For instance, A sari-sari store owner sells quality products encourage customers to buy more and
keeps them coming back as they say, “Go above and beyond for customers” and you will be
rewarded with repeat business.
Partnership
a. Provide Employment
● Providing employment opportunities for all is the single most effective means of tackling poverty
and social exclusion, thus improve individual’s standard of living.
● Residents in town and cities should share in higher living standards through employment.
b. Produce of Goods and Services
● Businesses are designed to serve a particular need that people have, and to provide trusted goods
and services related to that need.
● Without partnership business production of some of the goods and services will be inefficient.
● However, partners will bring out their technical and managerial skills during the production of
goods and services which has more quality and increase the qualities of such goods.
● Likewise, partnership business will allow individuals with limited capital to team up together to
produce necessary goods for the teaming population.
c. Increase Government’s Revenue
● Partnership business helps to increase governments revenue through the payment of taxes hence,
without partnership business, there would not be much private Companies which will on the other
hand affect the government’s revenue generation.
● For instance, Marie and Pastries register the business with the Bureau of Internal Revenue (BIR)
which requires an annual registration fee and each of the partners will be taxed upon his/her share
of the income from the partnership hence, increasing government’s revenue.
CORPORATION
● Corporation is becoming a tool to improve quality of life. Better infrastructure and more jobs
improve the economy of the region and raises the standard of living for its residents.
● Corporation produces personal products and technology that are rapidly growing in popularity
that make people’s lives easier and faster.
● For instance, your smart phone allows you to stay always connected to your friends and family
members and you have access to an infinite amount of information right at your fingertips.
● Technology is there to make people’s lives easier and improve their quality of life.
COOPERATIVE
a. Provide Employment
● Cooperatives are significant in providing jobs, aside from giving salaries and wages to
employees, they also provide opportunities to upgrade the skills of their employees through
workshops and courses.
● They also offer employment to students on casual-appointment basis during long vacations.
b. Pay Local Taxes
● Cooperatives need to meet local tax obligation to stay in good legal standing.
● Taxes are used to maintain infrastructure of a city, such as roads, bridges, public transportation,
libraries and other public buildings and services.
● It is also used for the salaries of public employees such as teachers, nurses, doctors, agriculturist,
policemen and many more.
c. Respond to Production and Consumption
● Responsive production and consumption are “Doing more and better with less” increasing net
welfare gains from economic activities by reducing resource use, degradation, and pollution
along the whole lifecycle of the corporation, while increasing quality of life.
● The production and consumption of healthy food is envisioned to create healthy consumers,
reduce the cost of health maintenance, and increase the allocation of financial resources to
productive activities.
● It also promotes resource and energy efficiency, sustainable infrastructure, and providing access
to basic services, green and a better quality of life for all.
Business Ethics
● It is the set of moral principles or values that may be general or professional.
● It tells us what is right or wrong in business situation
Legal Responsibilities
● All business enterprise needs to comply with a country's laws and regulation.
● Obedience to local, national, and relevant international laws constitutes legal responsibility.
A selection of essential laws that explain legal responsibilities of the Philippine enterprises includes
the following:
Corporate Governance
- It is the set of procedures designed to ensure that the company is managed in the interests of the
shareholders
TAKE NOTE:
● Business ethics, legal responsibility and corporate governance help define the role of business
in economic development but the primary role of business in the socio-economic development is
the creation of jobs.
● Employment advances economic development and boosts social indicators to satisfactory level.
● The observance of business ethics, where business and industry look out for their stakeholders,
assures this honest wages of the employees, reasonable returns for investors and owners, and
decent transaction with suppliers certify income allocation.
MODULE 3
ACCOUNTANCY
Why is Accountability important?
Accountability is the obligation of an individual or organization to account for its activities, accept
responsibility for them, and to disclose the results in a transparent manner.
Accountability in the context of a business organization is the obligation to demonstrate that work has
been conducted in compliance with agreed rules and standards or to report fairly and accurately on
performance results vis-à-vis mandated roles and/or plans
A civil society organization without proper accountability system is fragile and open to rumors and
mismanagement and abuse of power.
FAIRNESS
- in the context of a business of organization involves balance of the interests involved in all
decision-making including any decisions related to hiring, firing (including the investigatory
process), and the compensation and rewards
- Overall, fairness has to do with justice, which is to give to another that which is due him/her.
Justice:
- (1) looks at the balance of benefits and burdens distributed among members of a group, and/or
- (2) can result from the application of rules, policies, or laws that apply to a society or a group. In
- general, the just results of actions override utilitarian results.
TRANSPARENCY
-Is the extent to which investors have ready access to required financial information about
company, such as price levels, market depth and audited financial reports.
- Helps reduce price vitality, because all the market participants can base decisions of value in the
same data.
- intrinsic or ethical salience: individual level
- instrumental salience: organizational and social levels.
- Transparency is defined as being authentic in the way an organization message themselves
externally – to stakeholders, to prospective customers and talent, and within the community.
- It allows stakeholders to understand whether the activities of social institutions provide a genuine
service to civil society and whether money is used appropriately.
STEWARDSHIP
- practice wherein people are intrinsically motivated to work for others or for organizations to
accomplish the tasks and responsibilities with which they have been entrusted.
- In Biblical terms, stewardship is defined as utilizing and managing all resources God provides for
the glory of God and the betterment of His creation.
- That definition plays a critical role in today’s business landscape. In the context of business
organization, stewardship refers to taking responsibility for the business and the effects it has on
the world around it.
- This involves considering more than just the bottom line and looking at elements such as values,
ethics, and morals
MODULE 6
BUDDHISM
- Founded by Siddhartha Gautama, the Buddha Basic Belief: People reach enlightenment, or
wisdom, by following the Eightfold Path and understanding the Four Noble Truths.
HINDUISM
● Basic Belief: Souls continue to be reborn.
The cycle of rebirth ends only when the soul achieves enlightenment, or freedom from earthly desires.
CHRISTIANITY
● Founded by Jesus of Nazareth
● Basic Belief: There is one God, and Jesus is the only Son of God. Jesus was crucified but was
resurrected. Followers reach salvation by following the teachings of Jesus.
ISLAM
● Founded by the Prophet Muhammad
● Basic Belief: There is one God. Followers must follow the Five Pillars of Islam in order to
achieve salvati
JUDAISM
● Founded by Abraham
● Basic Belief: There is one God. People serve God by living according to his teachings. God
handed down the Ten Commandments to guide human behavior.
SIKHISM
● Founded by Guru Nanak
● Basic Belief: There is one God. Souls are reborn.
● The goal is to achieve union with God, which a person does by acting selflessly, meditating and
helping others.
THE IMPACT OF BELIEF SYSTEM TO BUSINESS
PRACTICES
● It is a set of values about the good, bad, right, wrong, and halal, haram in the business world
based on the principles of morality are in accordance with Shariah.
● Islamic business ethics are based on Al-qur’an and Hadits.
THE PRINCIPLES OF BUSINESS ETHICS ACCORDING TO AL-QUR’AN:
● Prohibits business conducted by the evil (Surah 4:29)
● The business must not contain elements of usury (Surah 2:275).
● Business activities also have a social function either through Zakat and alms (Surah 9:34).
● The right to prohibit the reduction of an item or commodity that is acquired or processed with
medium dose or scales because it is a form of tyranny (Surah 11:85).
● Upholding the values of both economic and social balance, safety and kindness and do not
approve of the damage and injustice.
● Prohibited businesses do wrong (cheating) either for himself or to other businesses (Surah 7:85,
QS.2 : 205)
● Honesty
● Awareness about the social significance of business activity.
● Did not perjury.
● Welcoming/friendly.
● Should not pretend bid at high prices, so that other people are interested in buying at that price.
● Should not speak ill of other people’s business.
● Business must not interfere with the activities of worship to God.
● Paying employee wages before the sweat dried.
● Not monopoly.
● Should not be doing business in a state danger that can be harmful and damaging individual and
social life.
● Commodity businesses that sell goods that are holy and lawful.
● Business done voluntarily, without coercion.
● Soon be paying off credit obligations.
● Gives grace period if the debtor has not been able to afford.
● In first decade of the second millennium, Christian Ethics scholars have fruitfully debated
whether capitalism and the market economy deserve grateful praise because of its virtues or calls
for abolition for being praiseworthy in taking up the call to make businesses more socially
responsible.
● In the specific case of Catholic faith-in-action, one integrative finding involves the Catholic
perspective of human life.
● A Catholic businessman obliges himself to struggle to succeed in business while serving the
community and trying to live the life of a good Catholic in a world of temptations and
contradicting realities.
● They have to be ready to question the status quo, to stand on principles, and to transform their
communities: Catholic men and women, leaving the halls of learning ready to fight good fight –
to pay taxes properly, to not bribe, to speak against corruption, to create jobs and pay living
wages, to provide quality goods and services, to not steal nor cheat, men and women whose
hearts and minds are oriented toward the alleviation of poverty and to being good Catholic
business people.
● In the Philippines, a good number of Filipino Catholics/Christians have given ground to the
demand that religion resonate with the needs and desires of ordinary believers, especially the poor
and marginalized (Sison and Palma-Angeles, 1997).
● Two successful Philippine cases of socially oriented enterprises created by prominent Catholic or
Christian businessmen are: (1) Gawad Kaling and (2) Bangko Kabayan, an economy of
Communion based bank.