BUSINESS E T H I CS &

SOC IA L R ES P ON SI B I LIT I ES
LESSON 1.1
FORMS OF BUSINESS IN SOCIAL AND ECONOMIC
DEVELOPEMENT
BUSINESS

• IS AN ORGANIZATION THAT USES ECONOMIC RESOURCES OR INPUTS TO PROVIDE GOODS OR SERVICES

TO CUSTOMERS IN EXCHANGE FOR MONEY OR OTHER GOODS AND SERVICES.

• ALL BUSINESSES MUST ASSUME SOME LEGAL DESIGN THAT DESCRIBES THE RIGHTS AND LIABILITIES OF
PARTICIPANTS IN THE BUSINESS’S OWNERSHIP, CONTROL, PERSONAL LIABILITY, LIFE SPAN, AND
FINANCIAL CONFIGURATION.
FORMS OF BUSINESS ORGANIZATIONS
•ALL FORMS OF BUSINESS ORGANIZATIONS
CONTRIBUTE TO THE SOCIOECONOMIC GROWTH
AND DEVELOPMENT OF A COUNTRY.
SOLE PROPRIETORSHIP
• ALSO KNOWN “SINGLE PROPRIETORSHIP” IS A BUSINESS OWNED BY ONLY ONE PERSON WHO HAS
COMPLETE CONTROL AND AUTHORITY OF ITS OWN.

• ITS OWNS ALL THE ASSETS AND PERSONALLY ANSWERS ALL LIABILITIES OR LOSSES.
• THIS IMPLIES THAT THE CREDITORS OF THE BUSINESS MAY GO AFTER THE PERSONAL ASSETS OF THE
OWNER SHOULD THE BUSINESS FAIL TO PAY THEM. THE FACT IS MANAGE BY THE INDIVIDUAL MEANS THAT
IT IS A VERY FLEXIBLE AND THE OWNER RETAINS SUPREME POWER OVER IT.

• IT IS SIMPLEST, EASY TO SET-UP AND REGISTER THROUGH THE BUREAU OF TRADE REGULATION AND
CONSUMER PROTECTION (BTRCP) OF THE DEPARTMENT OF TRADE AND INDUSTRY (DTI),
 ADVANTAGES AND DISADVANTAGES OF A SOLE
PROPRIETORSHIP
ADVANTAGES DISADVANTAGES

1. Ease of formation and dissolution 1. Unlimited liability

2. Low startup costs and low operational overhead 2. Limited life

3. Typically subject for fewer regulations 3. Difficult for an individual to raise money for capital

4. No corporate income tax

 TYPES OF BUSINESSES IN SOLE PROPRIETORSHIP
Types Examples Types Examples

BOOKKEEPING CATERING COMPANY

HOME HEALTHCARE HOUSECLEANING SERVICES

FINANCIAL PLANNER FREELANCE WRITE

LANDSCAPER TUTORING

COMPUTER REPAIR VIRTUAL ASSISTANCE

SERVICES
 PARTNERSHIP
• IS A BUSINESS OWNED BY TWO OR MORE PERSON WHO BIND THEMESELVES TO CONTRIBUTE NONEY OR
INDUSTRY INDIVIDUAL TO A COMMON FUND WITH THE INTENTION OF DIVIDING PROGITS BETWEEN
THEMSELVES.

• POSSIBLY COULD BE AS SMALL AS MON AND POP TYPE OPERATION, OR AS BIG AS COME OF THE LARGE
LEGAL OR ACCOUNTING FIRMS THAT MAY AVE DOZENS OR PARTNERS.

• SIMILAR TO A CORPORATION A PARTNERSHIP IS A JURIDICAL ENTITY AND REGISTERED WITH THE

SECURITIES AND EXCHANGE COMMISSION (SEC).
 ADVANTAGES AND DISADVANTAGES OF A PARTNERSHIP
ADVANTAGES
1. Synergy resulting from two or more individuals
combining strengths.
2. Easy to form but requires developing a partnership
agreement
3. Subject to fewer regulations compared to
corporations.
4. Stronger potential of access to greater amounts of
capital
5. No corporate income taxes
DISADVANTAGES
1. Unlimited liability where general partners are
individually responsible for the obligations of the
business
2. Limited life with the withdrawal or death of a partner
as reasons to end partnership
3. Real possibility of disputes or conflicts between
partners that may lead to dissolve the partnership
 BUSINESSES IN PARTNERSHIP
Types Partners (Established)

EDISON ELECTRICAL LIGHTS CO. Thomas Edison & JP Morgan and the
Vanderbilts (1880

THE WRIGHT CO. Brothers Wilbur and Orville Wright

( 1872)

Warner Bros. Sam, Jack, Albert, and Harry Warner

(1923)

Parfums Chanel Coco Chanel and Pierre Wertheimer

(1924)

Hewlett- Packard Bill Hewlett and David Packard

(1939)
 BUSINESSES IN PARTNERSHIP
Types Partners (Established)

McDonald’s Richard and Maurice McDonald

(1948)

Microsoft Bill Gates and Paul Allen (1968)

Apple Steve Jobs and Steve Wozniak (1976)

Ben & Jerry’s Home made Ben Cohen and Jerry Greenfield
(1978)

Google Larry Page and Sergery Brin (1998)

CORPORATION
• IS A BUSINESS ORGANIZATION THAT HAS A SEPARATE LEGAL PERSONALITY FROM ITS OWNERS.
• OWNERSHIP N A STOCK CORPORATION IS SIGNIFIED BY SHARES OF STOCK. THE OWNER OR
STOCKHOLDERS HAVE THE BENEFIT OF LIMITED LIABILITY BUT HAVE LIMITED PARTICIPATION IN THE
COMPANY’S OPERATION. THE BOARD OF DIRECTORS, WHO CONTROLS THE ACTIVITIES OF THE
CORPORATION, IS ELECTED FROM THE STOCKHOLDER.

• IT IS A JURIDICAL ENTITY CREATED UNDER THE CORPORATE CODE AND REGISTERED WITH THE SEC.
 ADVANTAGES AND DISADVANTAGES OF A CORPRATION
ADVANTAGES DISADVANTAGES

1. Unlimited commercial life because corporation is an 1. Regulatory restrictions which can be costly
entity of its own and does not dissolve when
ownership changes
2. Greater flexibility in raising capital through the sale 2. Higher organizational and operational costs
of stock.
3. Ease of fransferring ownership by selling stock 3. Double taxation referring to income taxes that are
paid twice on the same source of earned income
4. Limited liability
 BUSINESSES IN CORPORATION
Types Products / Services (Established)
United Laboratories Drugstore/ Pharmaceutical
company (1945)

Jollibee Foods Corporation Tony Tan Caktiong (1975) Cubao

The SM Group of Companies Henry Sy (1950’s) Carriedo

Ayala Corporation Jaime Augusto Zobel de Ayala (1834)

The Philippine Long Distance Smart Communication (1928)

Telephone (PLDT)
 BUSINESSES IN CORPORATION
Types
Filinvest Development Corporation
The Lopez Group of Companies
Metropolitan Bank and Trust
Company or Metrobank
JG Summit Holding, Inc
LBC Express
Products / Services (Established)
Andrew L Gotianun (ALG Holdings)
Lopez Family ( Benpres Holding
Corp/ ABS CBN and Maynilad,
Meraldo, Rockwell Bayantel ,
Skycable, the Medical City
2006
Universal Robina, Robinsons, Digital
Telecom, JG Summit
Petrochemicals, Cebu Pacific Air ,
Robinsons Bank, … 1957
Carlos Linggoy Araneta, 1945