Republic of the Philippines

DEPARTMENT OF EDUCATION
Region V
Schools Division of Sorsogon
GALLANOSA NATIONAL HIGH SCHOOL
San Pedro, Irosin, Sorsogon
SENIOR HIGH SCHOOL

Name of Student/ Pangalan ng Estudyante: ________________________________________________

Learning Area-Grade Level & Section/ Asignatura-Antas at Seksiyon: ___________________________

Date/ Petsa: _______________________

LEARNING ACTIVITY SHEET /GAWAING PAGKATUTO (Number/Bilang ) ___1_

Title: ___________________________________________________________

I. Introduction
This lesson was designed and written in the hope to produce young entrepreneurs. This will
help you understand what the nature of business is, as well as its forms. It is also explained
in a way that could easily be understood by Senior High School students.

II. Learning Competency with code/Kasanayang Pampagkatuto at koda

At the end of this module are expected to:
 Differentiate the forms of business organization in terms of their purpose and
role in socio-economic development. ABM_ESR12-III-ad-1.1; ABM_ESR12-III-ad-
1.2, ABM_ESR12-III-ad-1.3.

III. Activities / Pamaraan

A. Let Us Review/ Pagbalik-aralan Mo.

Directions: Analyze each sentence below and write whether it is True or False. Write
your answers on a separate sheet of paper.
1. Business is a passive process.
2. Tax preparation is more difficult in a sole proprietorship than in a corporation.
3. A corporation is a separate entity distinct from all the owners.
4. Your liability as a shareholder is only limited to the amount of your investment
5. A partnership may generate funds through selling shares of stocks.
6. A corporation may be owned by one person.
7. Handling money for a sole proprietorship is easier than partnership.
8. Book stores and sari-sari stores fall under the service businesses category.
9. Manufacturing businesses include baked goods and cosmetics.
10. The sole proprietor can pass the business down to his/her heir.
 B. Let Us Study/ Pag-aralan Mo.

A business is an active process which is an integral part of human society. It is an

organization where economic resources or inputs, such as materials and services, are
brought together and distributed to deliver or to give consumers goods, products, or
outputs. It involves significant operations such as buying, assembling, distributing,
advertising, selling, and accounting.
Most businesses aim to earn profit. The term profit refers to the difference between the
amount received and the amount spent on something purchased, produced, or
manufactured. The fundamental reason for examining business activities from a moral point
of view is that business organizations should, in principle, help promote the common good
and protect the rights and interests of individuals.
Three types of business organizations are generally operated for profit - service,
merchandising, and manufacturing businesses.
Service businesses provide services to customers rather than products. Examples:
computer repair, laundry services, tutoring, delivery services, wellness (such as gym or spa),
etc.
Merchandising businesses sell to customers products they buy from other businesses.
Examples: sari-sari stores, bookstores, department stores, groceries, supermarkets, etc
Manufacturing businesses turn basic inputs into products which are sold to consumers.
Examples: shoe manufacturing, baked goods, candle manufacturing, cosmetics
manufacturing, wine production, etc.
Forms of Business Organizations
1. Sole Proprietorship- It is a one-person business. The owner has full control over the
finances and operations and decides alone.
Advantages:
a. Tax preparation is faster. Simply file an individual income tax return including losses
and profits to your business. Your personal and business income is considered the same and
the tax implications for self-employed individuals would apply.
b. Sole proprietorship has lower start-up costs.
c. Handling money for the business is easier.
d. Sole proprietorships have the least government rules and regulations that affect
them.
e. The sole proprietor can own the business for as long as he/she wants, and when
he/she wants to move out, he/she can cash in and sell the business.
f. Even in common practice, the sole proprietor can pass the business down to his/her
heir.
Disadvantages:
a. The sole proprietor is personally liable for all debts and actions of the enterprise.
b. There is lack of financial control because of looser structure of sole proprietorship.
c. There could be difficulty in raising capital.

2. Partnership- It is a business relationship between two or more people. It refers to an arrangement

where individuals share a business venture's profits and liabilities. The partners give feedback on how to
use the capital and other critical strategic decisions that may provide different perspectives.

Advantages:

a. Partnership business lacks formality as compared with managing a limited company or corporation.
b. It is easy to start. The partnership may be created either verbally or in writing.

c. You share the burden. You have companion and support.

d. Every partner would add his/her own expertise, skills, experience, and connections to the business,
thus giving it a greater chance of success.

e. There is better decision-making. Two heads are better than one.

f. There is privacy. The business deals may be kept confidential by the partners.

g. The partners own and control the business.

h. The more partners there are, the more funds are available in the company, which can be used for
possible expansion. Its borrowing capacity is also likely to be higher.

i. There is an easy access to profits in a business partnership. The partners just have to divide the profits.

Disadvantages:

a. The business does not have any independent legal status.

b. The business has no separate legal personality, so the partners are personally liable for the debts and
losses incurred.

c. The partnership business often seems to lack the sense of prestige more closely associated with a
corporation.

d. A partnership will often find it more difficult to raise money than a corporation.

e. There is a potential of differences and conflicts.

f. Decision-making can be slower because there is a need for consultation among partners.

g. The profit must be shared among the partners.

h. It may require a lot of time and energy thus may affect life-work balance.

i. The profits earned by the partnership will be translated to income on the individual partners. Thus,
they are subject to income tax in the financial year in which they are made.

j. There are limits on business development like unlimited liability, lack of funding opportunities, and a
lack of commercial status, etc.

3. Corporation. It is an entity created by law that is independent and distinct from its owners and relies
on the corporate laws of the state in which it is incorporated to continue its existence. Corporations
have an advantage in generating money for the company. It can raise funds by selling shares of stocks. It
files taxes separately from its owners.

Advantages:

a. The liability of the shareholders of a corporation is limited up to the amount of their investments.

b. A publicly held corporation may sell shares or issue bonds to raise substantial amounts.

C. It is easy for a shareholder to sell shares in a corporation.

d. A corporation’s life has no limit, ownership can pass through many generations.

Disadvantages:
a. The corporation pays taxes on its income depending on its type and the shareholders pay dividend
taxes, so income gets taxed twice.

b. The management team of a corporation can operate the business without any real oversight from the
owners.

C. Lets practice
A. Directions: Below are sentences that characterize the forms of business. Classify them by
writing each sentence to the proper column. Number one was given as an example. Write
your answers from numbers 2-10 on a separate sheet of paper.
1. It is a business relationship between two or more people.
2. It is operated and owned by one person.
3. It is an independent entity.
4. The individuals agree to share profits and liabilities.
5. It can sell shares of stocks.
6. There is sharing of burden.
7. There could be difficulty in raising capital.
8. The decisions are made by a person alone.
9. It files taxes separately from its owners.
10.The owner controls fully the financial and operational matters.

Sole proprietorship Partnership Corporation

. It is a business relationship
between two or more
people.

B. Directions: Supply the appropriate information on the table. Copy the table and write
your answers on a separate sheet of paper.
1. Sole Proprietorship

advantages disadvantage
1. 1.
2. 2.
3. 3.
2. Partnership

advantages disadvantage
1. 1.
2. 2.
3. 3.
3. Corporation

advantages disadvantage
1. 1.
2. 2.
3. 3.

D. additional activities
Directions: Share your insights on the situation below. Write your answers on a separate
sheet of paper. A rich relative of yours tells you that he/she is willing to lend you one million
pesos without any interest and ask you to start a business. What kind of enterprise do you
prefer? Describe it briefly.
___________________________________________________________________________
 _____
___________________________________________________________________________
_____
Directions: Create your business logo. Use a separate sheet of paper for your drawing.

IV. Reflection / Pangwakas

what I have learned
Directions: Answer the following questions on a separate sheet of paper.
1. Define business and its forms using your own words.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
2. In your own words, differentiate sole proprietorship, corporation, and partnership.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
3. Why do people engage in business? You may explain your answer by providing an
example. __________________________________________________________________
__________________________________________________________________
_________________________________________________________________
V. Rubric for scoring/ Rubrik sa Pagpupuntos (if necessary)

Rubrics: Creativity/aesthetic value

6 points
Excellent - 6
Very good - 5
Good - 4
Fair - 3
Somewhat fair – 2
Needs improvement - 1
Explicit/implied message of the logo 2 points
Relevance of the logo to the business 2 points
Total 10 points

VI. Answer Key/Susi sa Pagwawasto

VII. References for learners/Mga Sanggunian

Prepared by/ Inihanda ni:

____________________________________