Business Add PPT!


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Business Add PPT!

  1. 1. BUSINESS
  2. 2. <ul><li>- distribution and exchange of all the surplus goods produced in the fields, seas, forests and factories of the earth so that they reach the final consumer in the right place and at the right price. </li></ul>
  3. 3. <ul><li>- any legal activity undertaken on a continuous basis which involve manufacturing, selling/marketing, financing or the creation of service with the objective of obtaining profit </li></ul>
  4. 4. <ul><li>- any activity where resources are invested in anticipation of profit. </li></ul>
  5. 5. Elements of Business <ul><li>Economic activity </li></ul><ul><li>Investment of resources </li></ul><ul><li>Prices </li></ul><ul><li>Profits </li></ul><ul><li>Risks </li></ul>
  6. 6. Types of Risks <ul><li>Physical </li></ul><ul><li>Nature (characteristics) </li></ul><ul><li>Changes in government or legislature </li></ul><ul><li>Personal and financial status </li></ul><ul><li>Theft </li></ul><ul><li>Physical distribution </li></ul>
  7. 7. Factors which affect the choice of a particular business <ul><li>The only available opening </li></ul><ul><li>Available funds </li></ul><ul><li>Special aptitude or interest </li></ul><ul><li>Social status </li></ul><ul><li>Competitive situation </li></ul><ul><li>Location </li></ul><ul><li>Social values of the community </li></ul><ul><li>Potential and present demands </li></ul>
  8. 8. Reasons why people go into business <ul><li>Social approval (prestige) </li></ul><ul><li>Profit </li></ul><ul><li>Service to the community </li></ul><ul><li>Personal satisfaction </li></ul><ul><li>Livelihood </li></ul><ul><li>Power </li></ul><ul><li>Protection and economic security </li></ul><ul><li>Status </li></ul><ul><li>Experience, training, and education </li></ul><ul><li>To exercise one’s profession </li></ul>
  9. 9. Causes of business failure <ul><li>Poor management </li></ul><ul><li>Undercapitalization </li></ul><ul><li>Poor planning </li></ul><ul><li>Legal problems </li></ul><ul><li>Accounting problems </li></ul><ul><li>Lack of frugality </li></ul><ul><li>Underestimating the competition </li></ul><ul><li>Location </li></ul><ul><li>Incapable or dishonest workers </li></ul><ul><li>Economic conditions </li></ul>
  10. 10. Classification of Business <ul><li>As to activity </li></ul><ul><ul><li>Industry </li></ul></ul><ul><ul><li>Commerce </li></ul></ul><ul><ul><li>Finance </li></ul></ul><ul><ul><li>Service </li></ul></ul><ul><li>As to size </li></ul><ul><ul><li>Micro </li></ul></ul><ul><ul><li>Small scale </li></ul></ul><ul><ul><li>Medium scale </li></ul></ul><ul><ul><li>Large scale </li></ul></ul><ul><li>As to ownership </li></ul><ul><ul><li>Sole proprietorship </li></ul></ul><ul><ul><li>Partnership </li></ul></ul><ul><ul><li>Corporation </li></ul></ul><ul><ul><li>Cooperative </li></ul></ul>
  11. 11. 1. As to activity <ul><li>Industry </li></ul><ul><li>concerned with production, the application of labor upon raw materials so that greater usefulness becomes possible after the processing; </li></ul><ul><li>conversion of raw materials into finished products or goods </li></ul>
  12. 12. <ul><ul><li>Extractive </li></ul></ul><ul><ul><ul><li>draw their products from nature or natural resources </li></ul></ul></ul><ul><ul><li>Manufacturing </li></ul></ul><ul><ul><ul><li>work on raw materials and supplies turned out by the extractive industries; </li></ul></ul></ul><ul><ul><ul><li>change these materials into various articles; or for further processing either by altering their form to increase their usefulness or combine them with new products </li></ul></ul></ul>1. As to activity
  13. 13. 1. As to activity <ul><li>Commerce </li></ul><ul><ul><li>activity that makes available to the buyer the goods he would like to acquire </li></ul></ul><ul><li>Finance </li></ul><ul><ul><li>activity which specializes in providing investment capital or working capital; </li></ul></ul><ul><ul><li>engaged in capital formation and extending the capital formed to others for wise expenditure </li></ul></ul>
  14. 14. 1. As to activity <ul><li>Service </li></ul><ul><li>those which serve the public or community service in general on a community or national basis </li></ul><ul><li> those which may be termed professional or trade services who capitalize on personal talent rendering services in the manner preferred by the client </li></ul><ul><li>Receives payment in the form of fees </li></ul>
  15. 15. <ul><li>As to size </li></ul><ul><li>Micro </li></ul>Not more than P3M 1 - 10 b. Small scale P3,000,000 – P15M 11 - 99 <ul><li>Medium scale </li></ul>P15,000,001 – P100 M 100 - 199 d. Large scale Above P100M 200 above
  16. 16. 3. As to ownership <ul><li>Sole Proprietorship </li></ul><ul><li>the simplest and oldest form of organization </li></ul><ul><ul><li>One man organization </li></ul></ul><ul><ul><li>Proprietor sole responsible for all the activities and liabilities of the firm </li></ul></ul><ul><ul><li>Proprietor and business are one </li></ul></ul><ul><ul><li>Particularly successful in </li></ul></ul><ul><ul><ul><li>Retailing </li></ul></ul></ul><ul><ul><ul><li>Craftwork </li></ul></ul></ul><ul><ul><ul><li>Service of a personal nature </li></ul></ul></ul>
  17. 17. Advantages <ul><li>Simplicity and flexibility of control and movement </li></ul><ul><li>Personal income tax </li></ul><ul><li>Presence of personal elements </li></ul><ul><li>Secrecy </li></ul><ul><li>Easy to start, expand or terminate </li></ul><ul><li>Only small amount of capital is required </li></ul><ul><li>Profit belongs entirely to the owner </li></ul><ul><li>Few legal requirements </li></ul>
  18. 18. Disadvantages <ul><li>Unlimited liability </li></ul><ul><li>Limited capital and credit accommodation </li></ul><ul><li>Lack of all around business ability </li></ul><ul><li>Lack of opportunity for employees </li></ul><ul><li>Lack of continuity </li></ul><ul><li>Long and irregular working hours </li></ul><ul><li>Lack of provision for retirement </li></ul><ul><li>Limitation upon the extent to which its powers can be delegated </li></ul>
  19. 19. <ul><li>Partnership </li></ul><ul><li>Two or more persons bind together to contribute money, property or industry to a common fund with the intention of dividing the profits among themselves </li></ul>
  20. 20. <ul><li>Control of business is held jointly by the partners, in the absence of limiting agreement among the partners, the power of control of management is held equally divided; equal voice in the management, equal shares in profit and loss. </li></ul><ul><li>Relationship is based on an agreement either written or oral. </li></ul>
  21. 21. Partnership Agreement or Articles of Partnership must include the following: <ul><li>Name of firm </li></ul><ul><li>Location and type of business </li></ul><ul><li>Length of life of the Partnership Agreement </li></ul><ul><li>Names of the partners and investment made by each </li></ul><ul><li>Distribution of profit and loss </li></ul>
  22. 22. <ul><li>Provision for salaries of partners </li></ul><ul><li>Agreement on the amount of interest to be allowed on capital and drawing account balances </li></ul><ul><li>Limitation on withdrawal of funds </li></ul><ul><li>Provision of an accounting system and fiscal year </li></ul><ul><li>Method that will be followed in case of withdrawal of a partner from the firm and other causes of dissolution </li></ul>
  23. 23. Disadvantages <ul><li>Larger amount of capital </li></ul><ul><li>Access to greater or better credit facilities </li></ul><ul><li>Combined judgment and managerial skills </li></ul><ul><li>Retention of valuable employees </li></ul><ul><li>Personal interest in business </li></ul><ul><li>It could be as easily formed as the single proprietorship </li></ul><ul><li>There are more persons to handle the problems of the business </li></ul><ul><li>Generally free from government control </li></ul>
  24. 24. Disadvantages <ul><li>Unlimited liability of the general partner, limited for limited partner </li></ul><ul><li>Disagreement among partners </li></ul><ul><li>Difficulty in assigning managerial responsibilities </li></ul><ul><li>Group commitment </li></ul><ul><li>Easily and unexpectedly terminated </li></ul><ul><li>Lack of continuity </li></ul>
  25. 25. Kinds of Partnership <ul><li>Extent of Liabilities </li></ul><ul><ul><li>General Partner </li></ul></ul><ul><ul><ul><li>a partner who has unlimited liability for the debts of the firm </li></ul></ul></ul><ul><ul><li>Limited Partner </li></ul></ul><ul><ul><ul><li>a partner of a limited partnership who does not assume responsibility for the debts beyond the amount of his investment </li></ul></ul></ul>
  26. 26. <ul><li>As to participation in management </li></ul><ul><ul><li>Secret – active, not known </li></ul></ul><ul><ul><li>Silent – not active, known </li></ul></ul><ul><ul><li>Dormant or sleeping – not active, not known </li></ul></ul><ul><ul><li>Nominal – not a partner </li></ul></ul><ul><li>As to share of profits/investment </li></ul><ul><ul><li>Senior </li></ul></ul><ul><ul><li>Junior </li></ul></ul><ul><ul><li>Capitalist </li></ul></ul><ul><ul><li>Industrial </li></ul></ul>
  27. 27. c. Corporation <ul><li>An artificial being created by operation of law having the right of succession and the power, attributes, properties, expressly authorized by the law or incident to its existence. </li></ul><ul><li>Board of directors are elected by the members to fix the policies and conduct of affairs of the company </li></ul>
  28. 28. <ul><li>Operates through delegated authority and responsibility </li></ul><ul><li>Life is 50 years an renewable </li></ul><ul><li>Upon issuance of SEC certificate, the corporation has start operation within 2 years or the operation would close </li></ul>
  29. 29. Advantages <ul><li>Ease of acquiring large amount of capital </li></ul><ul><li>Continuity of life of the business </li></ul><ul><li>Easy to transfer ownership </li></ul><ul><li>Limited liability of shareholders </li></ul><ul><li>Ease of expansion </li></ul><ul><li>Legal entity or legal identity </li></ul><ul><li>Efficiency of management </li></ul>
  30. 30. Disadvantages <ul><li>More government legal restrictions and intervention </li></ul><ul><li>More tax liabilities </li></ul><ul><li>Greater organizational expenses </li></ul><ul><li>Lack of secrecy </li></ul><ul><li>Lack of personal interest </li></ul><ul><li>Lesser management flexibility than sole proprietorship </li></ul>
  31. 31. Parties involve in a Corporation <ul><li>Incorporators </li></ul><ul><li>Corporators </li></ul><ul><li>Stockholders </li></ul><ul><li>Members </li></ul>
  32. 32. Kinds of Corporation <ul><li>Stock </li></ul><ul><li>Non-stock </li></ul><ul><li>Profit </li></ul><ul><li>Non-profit </li></ul><ul><li>Open </li></ul><ul><li>Close </li></ul><ul><li>Public </li></ul><ul><li>Private </li></ul><ul><li>Domestic </li></ul><ul><li>Foreign </li></ul>
  33. 33. d. Cooperative <ul><li>A voluntary business organization formed by its members or patrons for the purpose of collectively carrying on a business activity that directly benefit its members </li></ul><ul><li>It is a non-profit, owned, managed and democratically controlled on a mutual basis by its members. </li></ul><ul><li>Profit is called savings </li></ul><ul><li>CDA </li></ul>
  34. 34. Principles of Cooperative <ul><li>Open membership </li></ul><ul><li>Democratic control </li></ul><ul><li>One man, one vote </li></ul><ul><li>Limited interest on capital </li></ul><ul><li>Patronage refund </li></ul><ul><li>Neutral to political, religious, or other controversial matters </li></ul><ul><li>Education to members </li></ul><ul><li>expansion </li></ul>
  35. 35. Types of Cooperatives <ul><li>Consumer cooperative </li></ul><ul><li>Credit or finance </li></ul><ul><li>Producer cooperative </li></ul><ul><li>Marketing </li></ul><ul><li>Multipurpose </li></ul>
  36. 36. Differences between cooperatives and corporations Factors Corporation Cooperative Objective/ purpose profit Service to its members Control on management of the organization Election of Board of Directors based on the # of shares Proxy allowed One man, one vote Distribution of earnings Based on the # of shares held Based on the volume of purchase made with the coop
  37. 37. Other types of business ownership <ul><li>Franchising </li></ul><ul><li>Merger/integration </li></ul><ul><ul><li>Horizontal </li></ul></ul><ul><ul><li>Vertical </li></ul></ul><ul><ul><li>Lateral </li></ul></ul><ul><ul><li>Amalgamation </li></ul></ul><ul><li>Holding Company </li></ul><ul><li>Multinational Companies </li></ul><ul><li>Joint Venture </li></ul>
  38. 38. <ul><li>Franchising – is where a company helps to establish people in business using its name and products or processes. This is a more recent and rapidly growing form of business ownership. </li></ul><ul><li>Merger or integration – two or more firms combine together to form a larger unit </li></ul>
  39. 39. <ul><li>Holding company are formed just to take a controlling interest in other firms </li></ul>
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