Business Organization

Sole proprietorship
Partnership
Corporation
 SOLE
PROPRIETORSHIP
- owned by single
person
- simplest form of
legal organization
 - ease of formation
- control over operations
ADVANTAGE - no sharing of profits
- Simplicity
- no taxation
 - limited life
- unlimited liability

DISADVANTAGE - difficulty in raising

capital
- limitations of skills
Registration and Organizing Basic Requirements

1 2 3 4 5
Register at Register in Register in BIR If you have
Register
Baranggay Mayor’s Office employees -
business
SSS, Philhealth,
name at DTI
HDMF
PARTNERSHIP
- Is composed of two or
more persons who
agree to contribute
money, property, or
services for the
purpose of dividing the
profits between or
among themselves.
ARTICLES OF 1. Name of the partnership
2. Principal place of
CO-PARTNERSHIP business
3. Date of effectivity
4. Purpose of the
partnership
5. Names, address, and
contribution of partners
 6. Agreement as to the manner

ARTICLES OF of management of the

partnership
CO-PARTNERSHIP 7. Manner of dividing the
profits between or among the
partners
8. Manner of liquidating the
partnership with the rights and
duties of the partners
9. Arbitration of Disputes
ADVANTAGES DISADVANTAGES
● Easy to organize, ● Limited life
● Easy to Handle ● Unlimited Liability
● Better Capitalization ● Mutual Agency
● Difficulty in Raising
Capital
CORPORATION
- Multi-owner
organization
- Legal person
Characteristics of a Corporation
● Separate legal entity
● Created by operation of the law
● Right of succession
● Powers, Attributes, Properties authorized by law
● Ownership divided into shares
● Board of Directors
ADVANTAGES ●
●
Limited liability
Indefinite life
● No mutual agency
● Ease of obtaining
additional capital
● Ease of transfer of
ownership
● Separate legal entity
DISADVANTAGES ● Double taxation
● More government
control
● Most costly organize
● More involve decision-
making
● Dilution of earnings and
control
Classes of Corporation
As to Membership As to compliance As to law As to extent of
As to purpose
Holding of law creation membership
● Stock ● Public ● De jure ● Domestic ● Open
Corporation Corporation Corporation Corporation Corporation
● Non-stock ● Private ● De facto ● Foreign ● Closely-held
Corporation Corporation Corporation Corporation Corporation
● Quasi-public
Corporation
AS TO MEMBERSHIP HOLDINGS
● STOCK CORPORATION
- a for-profit corporation that has shareholders, each
of whom receives a portion of the ownership of the
corporation through shares of stock
● NON-STOCK CORPORATION
- a non-profit corporation that does not have capital
stock
 AS TO PURPOSE
● PUBLIC CORPORATION
– a corporation organized to govern a portion of the state
● PRIVATE CORPORATION
– a corporation organized for a private benefit, aim or end
● QUASI-PUBLIC CORPORATION
- a private corporation which is given a franchise to perform
functions of a public character
AS TO COMPLIANCE OF LAW
● DE JURE CORPORATION
– a corporation which exists in both law and fact
● DE FACTO CORPORATION
– a corporation which exists only in fact but not in law
AS TO LAW OF CREATION
● DOMESTIC CORPORATION
– a corporation recognized under Philippine Laws
● FOREIGN CORPORATION
– a corporation that is organized under the laws of
other countries
AS TO EXTENT OF MEMBERSHIP
● OPEN CORPORATION
– a corporation whose ownership is widely held b many
investors
● CLOSELY-HELD CORPORATION OR FAMILY CORPORATION
- a private corporation in which 50% or more of its stock is
owned by 5 persons or less
Components of a Corporation
INCORPORATORS – people mentioned in the articles of
incorporation who originally formed and composed the
corporation
CORPORATORS – persons who comprise the corporation

SHAREHOLDERS – the corporators of a stock corporation

Components of a Corporation
MEMBERS – corporators of a non-stock corporation
PROMOTERS – a firm or person who does the preliminary work
incidental to the formation of a corporation
SUBSCRIBERS – persons who agreed to take original, unissued
shares but will pay at a later date
UNDERWRITERS – those who undertake to dispose of the shares to
the general public
PROMOTING A CORPORATION
PROMOTION
- The incorporators make preliminary arrangements
to set up a tentative working organization
INCORPORATION
- The process of formalizing the organization of the
corporation
COMMENCEMENT
- The business should start operation
 ARTICLES OF
1. Name of the
corporation INCORPORATION
2. Purpose for
which the
corporation is
formed
3. the place of the
principal office of
the corporation
 ARTICLES OF
4. Term of existence of the
corporation, not exceeding INCORPORATION
50 yrs
5. The names, nationalities,
and addresses of
incorporations
6. Names of directors who
will serve until their
successors are duly elected
and qualified in accordance
with the by-laws
 ARTICLES OF
7. The authorized share
capital, the classes of share
capital to be issued, and the
INCORPORATION
number of shares and terms
of each class indicating the
par value per share

8. Amount of subscription to
the share capital, the names
of the subscribers and the
number of shares subscribed
by each
 ARTICLES OF
9. The total amount paid
on the subscriptions to
INCORPORATION
the share capital and the
amount paid by each
subscriber on his
subscription
 ● It is amount fixed by the
corporate charter to be

SHARE subscribed and paid in or

secured to be paid in by the
CAPITAL shareholders of a
corporation either in money
(CAPITAL STOCK) or in property, labor or
services upon the
organization of the
corporation or afterwards
and upon which it is to
conduct its operation
● PREFERENCE SHARE
CAPITAL
● ORDINARY SHARE
CAPITAL
 ● Generally issued with a
PREFENCE par value and a dividend
rate
SHARE ● The holders of preference

CAPITAL
shares have priority as to
distribution of dividends
(PREFERRED STOCK) and as to distribution of
assets in the event of
corporate liquidation.
ORDINARY ● Represent residual
ownership equity

SHARE ● The holders of this class

of share capital carry the
CAPITAL greatest risk
● Right to vote
(COMMON STOCK)
 Thank you!
Members:
Alcuran | Bauan | Fernando | Larino | Manila | Roxas