OWNERSHIP AND

ORGANIZATION
The Forms of Business Organization
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 TABLE OF
⬤ Introduction
CONTENTS
● Corporation

⬤ Objectives ● Cooperative

⬤ Things to consider in selecting the best ● General requirement and procedures

legal form of organization for registration

⬤ Sole Proprietorship

⬤ Partnership
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Introduction
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 Introduction
This presentation provides the participants concepts of each type or class
of ownership and organization an entrepreneur can choose in starting up a
business.

Advantages and disadvantages of each type of ownership and organization

will be discussed. Although there is no best form of ownership in general,
there may be one best form of ownership for each circumstance based on
the biases and preferences of the entrepreneur.
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Objectives
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 Objectives
● Increase listener’s awareness of different forms of business ownership,
thereby, allowing them to choose the right form of organization in
putting up a new business.

● Help listeners analyze the advantages and disadvantages of each form

or organization.

● Provide listeners the legal requirements of each type of ownership and

organization.
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 Things to consider in
selecting the best legal form of
organization
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 Things to consider in selecting the best legal
form of organization:
Ownership Incentives

● How many owners will there be? Will ● Will the business be able to provide incentive necessary to
there ownership be equal? attract the managerial talent needed for growth and success?

Management
Taxation
● Will the owners also manage the firm?
● What legal form will minimize the total tax load impose on the
business?

Financing Retention of Income

● How much money is needed to start or ● Which form will provide the maximum income?
purchase the business and what sources
might provide it?
Protection
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Liability ● Will the asset values developed in the business over time be
● Is it desirable to separate the assets of the business from preserved if key persons become unavailable because of illness
or death?
the personal assets of the owner?
 Sole Proprietorship
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 Sole Proprietorship
The sole proprietorship or single proprietorship is a form of business
organization initiated, organized, owned or capitalized, and managed by a
single person.

As defined, the entrepreneur is the capitalist, the manager, and

administrator, and in the beginning of the business, he practically does
everything for the business.
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 Advantages of Sole Proprietorship

Easily created Direct, All rewards to Flexibility Minimum

and undiluted owners regulation and
terminated action taxation
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 Disadvantages of Sole Proprietorship

Unlimited Capital Perils of Limited skills and

liability limitations individual capabilities of the
sole owner
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Partnership
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 Partnership
A partnership is an associate of two or more business partners who co-own
a business for the purpose of making profit.

In a partnership, the co-owners (partners) share the assets, liabilities, and

profits of the business according to the terms of the partnership agreement.
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 Types of
General partner
Partners:
Limited partner Silent partner

Dominant partner Capitalist partner

Managing partner Industrial partner Secret partner

Nominal partner or partner by estoppel Liquidating partner

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 Advantages of Partnership

Pooling of Ability to Simplicity and Limited

resources obtain capital incentive regulation and
taxation
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 Disadvantages of Partnership

Unlimited Tenuous Independence on Problems in share

liability existence management liquidation
harmony and
coordination
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Corporation
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 Corporation
A corporation is an artificial being, invisible, intangible, and exists only in
contemplation of law. Its owners are the stockholders who can sell their
interests in the corporation without affecting the continuity of its
operations because the life of the corporation is dependent or distinct from
that of the owners or stockholders.
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 Advantages of Corporation

Limited Legal entity Ready Obtaining Employee

liability transferability of capital benefits
ownership
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 Disadvantages of Corporation

Legal Cost and time Taxation Potential loss of

formality and involved in the control by
cost incorporation founders of the
process corporation
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Cooperative
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 Cooperative
Republic Act 6938, otherwise known as the Cooperative Code of the
Philippines, defined a cooperative as a duly registered association of
persons, with a common bond of interest, who have voluntarily joined
together to achieve a lawful common social or economic end, making
equitable contributions to the capital required, and accepting a fair share
of the risks and benefits of the undertaking in accordance with universally
accepted cooperative principles.
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 Principles of
Cooperative
Open and voluntary membership

Democratic control

Limited interest on capital

Division on net surplus

Cooperative education

Cooperation among cooperatives

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 Advantages and Disadvantages of Cooperative

Tax privilages Ability to Inequality of Pro-masses or

provide direct profit pro-poor bias
benefits distribution
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 General requirement
and procedures for registration
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 Registering a single
proprietorship
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This is where you section ends. Duplicate this set of slides as many times you need to go over all your sections.
 Did you know?

● Register the business name with the ● Application fee or registration fee of
Department of Trade and Industry (DTI) P110.00
under the Bureau of Domestic Trade.

● 2 pcs 2x2 picture

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 Registering a
partnership
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This is where you section ends. Duplicate this set of slides as many times you need to go over all your sections.
 Did you know?

● Prepare partnership agreement ● Evaluation of the aplication by the lawyer

and staff of Corporate and Legal
Department
● File the partnership agreement with the
SEC ● Release of the approved registration is
within 15 - 30 days
● Pay filing fee
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 Registering a
corporation
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This is where you section ends. Duplicate this set of slides as many times you need to go over all your sections.
 Did you know?

● Prepare Articles of Incorporation and By- ● Evaluation of application by lawyer and

laws, bank certification staff of Corporate and Legal Department

● Release of approved registration is within

● File Articles of Incorporation and By-laws
15 - 30 days
with the SEC

● Pay registration fee

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 Registering a
cooperative
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 Did you know?
The following documents shall be forwarded to CDA:

● Four (4) copies of the economic survey ● Four (4) copies of Articles of
with a general statement describing Incorporation together with the bond of
briefly the structure, purpose, economic accountable officers.
feasibility, area of operation, size of
membership, and other pertinent data. ● Four (4) copies of By-laws

● Registration fee as prescribed by CDA

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 THANK
YOU!
Do you have any questions?
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