Forms of Business Ownership and Registration

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FORMS OF BUSINESS

OWNERSHIP AND
REGISTRATION
INTRODUCTION

What is the meaning of forms of ownership?

• it's a legal entity that separates the rights and liabilities of


business and its owner/s.
•  the legal requirements for registration are, however, less
stringent that those for a private company. it's suitable for
businesses owned by between one and ten owners. members have a
pre-determined share in the business.

 PUBLIC COMPANY
 PRIVATE COMPANY
Business Owner Business Ownership

What’s a Business Owner? What's a business ownership?

• A business is the legal proprietor of a business. • Business ownership refers to the control over an
enterprise, providing the power to dictate the operations and
• An individual or groups that owns the assets of a functions.
firm and profits from them
Businesses can be acquired in several ways:
 Starting a new business
 Franchising an existing business
 Buying an existing business
Types of Business forms

 In the United States there are three major types of business ownership.
Understand the steps in establishing business

K1. Determine if entrepreneurship is what you want


 - Examine yourself, why do you want to be an entrepreneur. 

Conduct a self-assessment
 You need to plan, set goals, and above all, know yourself. What are your strengths? What
are your weaknesses? How will these affect day-to-day operations?

2. Refine your idea


 - After you self assess yourself you can now have a fresh new look at your idea and start
refining it. 
Start with a Lean Plan
 Lean Plan is a method of taking small steps, consistent tracking, and frequent course
corrections.

1. Find what people are attracted to and use it at your advantage.


2. Make small amount of your product or sell pre-orders.
3. Test assumption
4. Customer Feedback
5. Business Plan
3. Conduct market research
 - This process will help you address your opportunity, value proposition, the
market size, and competition sections of your Lean Plan.

Evaluate your target audience


 - Survey, pre-order, create ads, posting on social media.
 - Research the competition
 - Validate your idea
4. Write your business plan
 - A business plan is a formal written document containing the goals of a business, the
methods for attaining those goals, and the time-frame for the achievement of the goals. 
 Without a business plan as a baseline, it will be far more difficult to track your progress,
make adjustments, and have historical information readily available to reference when
making difficult decisions. 

 Pitch and get funding investors and loan providers need to know that you have a solid
understanding of the trajectory of your business. You need to prove that there is an
attainable and sustainable need for your solution, that you have a strong business strategy,
and that your business can be financially stable.
5. Make your business legal
 - If at all possible, work with an attorney to iron out the details. This is not an area you
want to get wrong. You will also need to get the proper business licenses and permits.
Depending upon the business, there may be city, county, or state regulations as well.
 - Business Name
 - Business Permit
 - BIR Permit
6. Fund your business
 Depending on the size and goals of your venture, you may need to seek financing from an
investor or from a venture capital firm. 
 But, most small businesses begin with a loan, financing from credit cards, help from
friends and family.
7. Pick your business location
 - Your business location will dictate the type of customer you attract, what types of
promotions you can run, and how long it will take you to grow. While a great location
won’t necessarily guarantee your success, a bad location can contribute to failure.

Things to consider when looking for location


 - Price
 - Visibility
 - Access to parking or public transportation
 - Distribution of competitors
 - Local, city, and state rules and regulations
8. Prepare for growth
 - Whether you’re starting your first or your third business, expect to make mistakes. This is
natural and so long as you learn from them.

 If you have your plan up to date, you can set up monthly review meetings to go over the
numbers, your strategy and develop forecasts for the next month, quarter, and year. This is
a simple way to keep track of performance and actively make decisions based on actual
results.
Differentiate the different forms of business ownership and their
advantages and disadvantages

 Factors to Consider when choosing a form of business:


• Size and nature of the business
• The level and control in handling the business
• The business’ vulnerability to lawsuits.
• Tax implications of the different ownership structures.
• Expected profit or loss of the business.
• Possibility of re-investing the earnings into the business.
• Access to cash out of the business for yourself.
• Are you likely to get along with your co-owners over an extended period of time?
• Is it important to you that the business survive you?
• What are your financing needs and how do you plan to finance your company?
• How much personal exposure to liability are you willing to accept?
• Do you feel uneasy about accepting personal liability for the actions of fellow owners?
SOLE PROPRIETORSHIP

• owned by one person who has day-to-day responsibility for running


the business. Sole proprietors can be independent contractors,
freelancers or home-based businesses. They do business activities but
doesn’t register as another kind of business. There is no separate
business entity, meaning there is no distinction between the business
owner’s personal and professional assets and liabilities.
• sole proprietors own all the assets of the business, profits generated
by it, and the complete responsibility for any of its liabilities or debts.
• Sole proprietorships are simple, easy to start, and one of the most
common types of business ownership. They are a good option for
someone starting a low-risk business on a trial basis. Also, no
additional taxation. The vast majority of small businesses start out as
sole proprietorships.
PARTNERSHIP

• two or more people share ownership of a single


business.
• The partners should have a legal agreement
(Partnership Agreement) that sets forth how decisions
will be made, profits will be shared, disputes will be
resolved, how future partners will be admitted to the
partnership, how partners can be bought out, or what
steps will be taken to dissolve the partnership when
needed. Similar to sole proprietorships, a partnership
is the simplest type of business ownership when two
or more people are involved. There are two kinds:
limited partnerships and limited liability partnerships.
• the vast majority are small businesses and some are
quite large.
Identify and classify the different government agencies
and areas of registration

 Department of Trade and Industry (DTI) – This is the government agency where single
proprietorship enterprises register and secure its  certificate of registration.
 Securities and Exchange Commission (SEC) –  This is the government agency
responsible for the registration and supervision of all corporations and partnerships
organized in the Philippines. Licensing of representative offices and branch offices is
likewise under this agency
 Bureau of Internal Revenue (BIR) – This is the government agency mandated by the law
to assess and collect all national internal revenue taxes, fees, and all charges. All types of
business entities are required to be registered here.
 Department of Labor and Employment (DOLE) – DOLE promotes gainful employment
opportunities, protects workers, and promotes their welfare, develop human resources, and
maintain industrial peace. DOLE likewise handles the issuance of Alien Employment Work
Permits (AEP).
 Philippine Health Insurance Corporation (PhilHealth) – This is the government agency
which requires all employees to be registered. The National Health Insurance Program
under this aimed at providing health insurance coverage and ensure affordable health care
services for all the citizens of the Philippines.
 Social Security System (SSS) – This is the government agency where employers and
employees are required to be registered. Funded through mandatory payroll contribution,
this is where citizens who are retired, currently unemployed or unemployable due to
disability are assisted.
 Cooperative Development Authority (CDA) – This is the government agency which
accredits all types of cooperatives in the Philippines.
 Home Development Mutual Fund (HDMF) – This is the government agency where
employees who are members of the Social Security System (SSS) are required to register.
 Various Local Government Units – Where local government permits and licences
necessary for the operation of the business are secured.
Know the causes of business failures and its prevention

 Poor business management


 Starting a business for the wrong reasons
 Faulty business planning
 Failing to go digital
1. Poor business management
 For the most part, a reason why small businesses succeed and why others fail lies in the
implementation of an effective business management—a must for small and startup
businesses. 

 So how would a business owner know the various steps on how to avoid business failure?
Either by educating themselves on all of the necessary skills, simply hire experts in those
fields they are lacking skills in and/or outsource most of the work to seasoned
professionals.
2. Starting a business for the wrong reasons

 If a business owner starts a company thinking it could be an avenue for easy money and
allow them to spend more time with their family, it’s safe to say that these considerations
are not the right reasons for starting a business.

 The right reasons and motivations to get started on a business are being passionate
about the concept of your business, being unfazed by failure, getting along with all kinds
of people and thriving on independence.
3. Faulty business planning
 Small businesses are known to fail simply because of their tendency to misfocus their
business plan, or not have a plan at all. Creating a business plan may seem like easy work,
but it must be able to cover all bases relevant to the business.

 An ideal business plan usually contains an updated SWOT (Strengths, Weaknesses,


Opportunities and Threats) analysis, process outlines, current information on factors
surrounding the business, audience socio-demographics and market analysis, employee
management and requirements, contingency plans, marketing plans and budgeting and
financial outlines.
4. Failing to go digital

 For businesses to thrive in the digital age, not having an online presence can be disastrous
—the business misses out on a huge potential market that could boost  growth.

 Creating and cultivating an online presence not only helps businesses connect with their
audiences, it also makes marketing and sales easier as it also boosts the authenticity of
the business. 
THANK YOU FOR
LISTENING!

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