FORMS OF BUSINESS

ORGANIZATIONS
• SOLE/SINGLE PROPRIETORSHIP
• PARTNERSHIP
• CORPORATION
• COOPERATIVES
SOLE PROPRIETORSHIP
• Business formed by a single individual.
• Considered the simplest form under which business
can operate.

Examples:
Mcdonal’s
Facebook
Walmart
 ADVANTAGES
• Ease of formation
• Full control of the business
• Owners can mix personal and business assets
• Owners have all the profits for themselves
• Simple taxation
DISADVANTAGES
• Unlimited liability
• Difficulty of raising additional capital
• Owner’s biased
PARTNERSHIP

• According to the partnership code of the Philippines,

title IX of the civil code of the Philippines, a
partnership is a contract whereby two or more
persons bind themselves to contribute money,
property, or industry to a common fund, with the
intention of dividing the profits among themselves.
ADVANTAGES
• Easier to create than a corporation
• Better ability to acquire capital than sole proprietorship
• Lareger pool of human capital than sole proprietorship
DISADVANTAGES
• Unlimited liability
• Mutual agency
• Limited life
EXAMPLES
• Jollibee (began as a partnership between Tony Tan
Caktiong and his family members)
• Ayala Land (real estate development company that
traces its roots back to a partnership formed by
Domingo Róxas and Antonio de Ayala in 1834)
CORPORATION
• Our law defines a corporation as an “an artificial
being created by operation of law, having the right
of succession and the powers, attributes, and
properties expressly authorized by law or incident to
its existence”
ADVANTAGES
• Ability to acquire additional capital
• Transferable ownership rights
• Limited liability of stockholders
• Virtually unlimited life
• Large pool of human capital
DISADVANTAGES
• Heavily regulated by the government
• Double taxation
• Not easy to for
• More expensive to form than sole proprietorship
and partnership
COOPERATIVES
• According to the cooperative code of the Philippines, “a
cooperative is a registered association of persons,
with a common bond of interest, who have voluntarily
joined together to achieve a lawful common or
economic end, making equitable contributions to the
capital required and accepting a fair share of risks and
benefits of the undertaking in accordance with
universally accepted cooperative principle”.
Let's simplify the
differences…
Partnership:

Imagine you and a friend decide to start a

lemonade stand together. You both own it, share
profits, and make decisions together. If something
goes wrong, you're both responsible.
Corporation:
Think of a big company like a superhero
team. It's its own thing, separate from the
people who own it. Shareholders are like
members of the team, and they elect a group
called the board of directors to make big
decisions. The board hires a CEO to run the
company day-to-day.
Cooperative:
Picture a group of farmers who team up to
sell their crops together. Each farmer owns a
share of the cooperative and has a say in
how it's run. They work together to benefit
everyone involved, sharing profits and
resources.
Main Difference:
In a partnership, you and a few others own and
run the business together. In a corporation, it's
like a big team with shareholders, a board of
directors, and a CEO calling the shots. A
cooperative is similar to a partnership, but it's
often made up of a group of people or
businesses working together for mutual benefit.