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Lecture Notes 2 - Types of Business

This document outlines different types of businesses and considerations for establishing a business. It discusses sole proprietorships, partnerships, and corporations as forms of business ownership. It also describes businesses based on their activities, such as services, merchandising, and manufacturing. Finally, it provides guidance on conducting market research, developing a business plan, finding funding, choosing a location, establishing a legal structure, and registering the business with relevant government agencies.

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Aaron Aivan Ting
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129 views4 pages

Lecture Notes 2 - Types of Business

This document outlines different types of businesses and considerations for establishing a business. It discusses sole proprietorships, partnerships, and corporations as forms of business ownership. It also describes businesses based on their activities, such as services, merchandising, and manufacturing. Finally, it provides guidance on conducting market research, developing a business plan, finding funding, choosing a location, establishing a legal structure, and registering the business with relevant government agencies.

Uploaded by

Aaron Aivan Ting
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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COBENTH Lecture Notes: Types of Business

Lesson 2
Types of Business

Business
● Organization where people work together
● Provides services to customers who have access to them for a period of time
● Main purpose is to maximize profit for its owners and stakeholders while maintaining
corporate social responsibility
● Economic activity of production and distribution of goods and services

A. Business Ownership
○ Sole Proprietorship
■ Business owned by only one person
■ Easiest to setup and least costly
○ Partnership
■ Business owned by two or more people
■ Partners contribute resources/assets into the business
○ Corporation
■ Business organization that has a separate legal personality (legally
considered as a person)
■ Incorporators are made up of 5 or more people

B. Business Activity
○ Service
■ Business that provides service
■ Offers Intangible products such as professional skills, expertise, advice,
etc.
■ Example: Jollibee
○ Merchandising
■ Business that buys and sells tangible goods
■ Wholesale or retail prices
■ Ex. Mercury Drug
○ Manufacturing
■ Purchases raw materials and process them to turn into new products
■ Combines raw materials, labor, and factory overhead production process
■ Ex. Microsoft and General Electric

Prepared by: Dr. Cristina Teresa Lim


Associate Professorial Lecturer
DSI Department, RVR College of Business
1
COBENTH Lecture Notes: Types of Business

C. Before Establishing Your Business:


○ Conduct market research to determine if there is an opportunity to do business
○ Make your business plan
○ Look for funding
○ Search for a strategic location
○ Come up with a business structure
○ Create a business name
○ Register your business

D. Register Your Business in the Following Government Offices:


○ Department of Trade and Industry (DTI)
■ Responsible for realizing the country’s goal of globally competitive and
innovative industry and services sector that contribute to inclusive
growth and employment generation

○ Securities and Exchange Commission


■ Governing body over all corporations, partnerships, or associations who
are the grantees of primary franchises and/or a license or permit issued
by the PH government
■ Protects investors, maintain fair, orderly and efficient markets while
facilitating capital formation

○ Bureau of Internal Revenue (BIR)


■ Responsible for collecting revenues for the government; in charge of
administering and the collection of taxes
■ Regulates finance, taxation, and monetary policy in the Philippines
■ Collects internal revenue taxes, fees, and charges and enforces all
forfeitures penalties and fines connected with tax matters for the
Philippine government

○ Republic of the Philippines Social Security Service Offices (SSS)


■ Insurance program mandated by the Philippine government to cover all
income earners or workers in the private sector
■ Beneficiaries and members - can avail benefits for retirement, disability,
sickness, and death

Prepared by: Dr. Cristina Teresa Lim


Associate Professorial Lecturer
DSI Department, RVR College of Business
2
COBENTH Lecture Notes: Types of Business

■ SSS is for private companies while GSIS is for government offices

○ Home Development Mutual Fund (HDMF/Pag-ibig Fund)


■ Pag-ibig stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko,
Industriya at Gobyerno (Cooperation for the Future: You, the Bank, the
Industry, and the Government)
■ Government-owned and controlled corporation under the housing and
labor development office
■ Founded by virtue of presidential decree no. 1530
■ Office that regulates and offers the need for a national savings program
and an affordable shelter financing for the Filipino worker
■ Active members should at least contribute for 24 months wherein
contribution is pegged at PHP100

○ Philippine Health Insurance Corporation (Philhealth)


■ Government-owned and controlled and connected with the Department
of Health (DOH)
■ Provides health insurance coverage and ensures affordable, acceptable,
available and accessible healthcare services for all citizens
■ Serves as the means for the healthy to help pay for the care of the sick
and for those who can afford medical care to subsidize those who cannot
■ Both government and private sector employees are required to register

○ Local Government Offices


■ City Hall
● All businesses are required to register their business with the City
Government or the Municipal Government.
● Procedure for the registration may differ depending on the city or
municipality concerned
● List of the general requirements needed to secure a
Business/Mayor’s permit:
a. Barangay Clearance
b. Community Tax Certificate with Gross Receipt
c. Financial Statement (Partnerships and Corporations)
d. BIR Clearance
e. SSS Clearance
f. For new businesses:

Prepared by: Dr. Cristina Teresa Lim


Associate Professorial Lecturer
DSI Department, RVR College of Business
3
COBENTH Lecture Notes: Types of Business

i. DTI Registration (Sole Proprietorship)


ii. SEC Registration (Partnerships and Corporations)

■ Barangay Hall
● A barangay clearance is a pre-requisite for the issuance of the local
government business permit.

E. Key Considerations in Establishing Your Business


○ Financing
■ Funding for business activities
■ Partner and work with other stakeholders

○ Marketing and Advertising


■ Marketing would be responsible for driving sales
■ Advertising exercises the promotion of company products and services
through different channels

○ Number of Employees
■ Make sure to hire and train the right employees

○ Location
■ Make sure to maximize opportunities and minimize costs
■ Do market research to identify feasibility of business idea as well as
determine the competitors and players within the location
■ See if there is demand for products or services and safety in that
particular location

Prepared by: Dr. Cristina Teresa Lim


Associate Professorial Lecturer
DSI Department, RVR College of Business
4

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