Colegio ng Lungsod ng Batangas                                   Batangas City                    Information and Communic...
A partnership is an association of two or more business partners who co-own a business for thepurpose of making a profit. ...
Limited liability                    Legal entity                    Ready transferability of ownership                   ...
Register the business name with the department of trade and Industry under the bureau of                domestic trade    ...
The summary of the pros and cons of various form of business organization is shown below. Itwould you give the entrepreneu...
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Document 11

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Document 11

  1. 1. Colegio ng Lungsod ng Batangas Batangas City Information and Communication TechnologyCourse title: EntrepreneurshipTopic: Ownership and OrganizationReporter: Evora, Marianne R. Perez, Ken Adams Balmes, Emmanuel Ibon, AlexanderInstructors: Mr. Gail B. Magalang Ownership and OrganizationIntroduction This module provides the participants concept of each type or class of ownership andorganization an entrepreneur can choose in starting up a business. Advantages and disadvantages of eachtypes of ownership and organization are discussed. Although there is no best form of ownership ingeneral, there may be one form of ownership for each circumference based on the biases and preferencesof the entrepreneur. Sole Proprietorship The sole proprietorship or single proprietorship is a form of business organization initiated,organized, owned or capitalized, and managed by single person.Advantages Easily created and terminated Direct, undiluted action All rewards to owners Flexibility Minimum regulation and taxationDisadvantages Unlimited liability Capital Limitation Perils of individuals Limited skills and capabilities Partnership
  2. 2. A partnership is an association of two or more business partners who co-own a business for thepurpose of making a profit. In a partnership, the co-owners (partners) share the assets, liabilities, andprofit of the business according to the term of the partnership agreement.Types of Partners General partners-A general partner is one who shares ownership and management of the business. Limited partners-they refer to partners with limited financial liability and they do not take active role in the management Silent partners-they refer to partners who do not take active participation in the business. Dominant partner-they are neither active in the partnership nor they are generally known to be associated with the business. Capitalist partner-this is the type of partner who contributes money or property to the common fund of the partnership. Managing partner-this is the partner who is designated to manage the operations of the business of the partnership. Industrial partner-this is a partner who contributes his knowledge or personal services to the partnership. Secret partner-this is a partner who takes active part in the business, but is not known to be a parties. Nominal partner or partner by estoppels-this is a partner who is actually not a partner, but is held out or represented as a partners. Liquidating partner-this is a partner who is designated to wind up or settle the affairs of the partnership after dissolution.Advantages Pooling of resources Ability to obtain capital Simplicity and incentive Limited regulation and taxationDisadvantages Unlimited Liability Tenuous existence Independence on management harmony and coordination Problems in share liquidation Corporation A corporation is a n artificial being, invisible, intangible, and exists only in contemplation of law.Its owners are the stockholder who can sell their interests in the corporation without affecting thecontinuity of its operation because his life of the corporation is dependent or distinct from that of theowner’s o stockholder.Advantages
  3. 3. Limited liability Legal entity Ready transferability of ownership Obtaining capital Employee benefitsDisadvantages Legal formality and cost Cost and time involved in the incorporation process Taxation Potential loss of control by founder of the corporation Cooperative Republic act 6938, otherwise known as the cooperative code of the Philippines, defined a cooperativeas a duly registered association of persons, with a common bond of interest, who have voluntarily joinedtogether to achieve a lawful common social or economic end, making equitable contribution to the capitalrequired, and accepting a fair share of the risk and benefits of the undertaking in accordance withuniversally accepted cooperative principles.Principle of cooperative Open and voluntary memberships- is open o all individuals, social and political, radial or religious background beliefs. Democratic control-affairs of the organization are administrated by personnel elected. Limited interest on capital-shared capital receives strictly limited rate or interest. Division on net surplus-net surplus arising out of the operation of cooperative belong its member. Cooperative education-all cooperatives are mandated to make provision for the education of the member, officer, and employee Cooperation among cooperatives-all cooperatives in order to best serve the interest of their member and communities.Advantages and Disadvantages of Cooperatives Tax privileges Ability to provide direct benefits o its member and the entire community it serves in the form of relatively cheaper products. Inequality of profit distribution The pro-masses or pro-bias of the cooperatives appears diametrically opposed to the entrepreneurs’ idea of servicing a market.General requirement and procedure for registration Government agencies concerned for updated or revised administrative rule s and policies,legislative enactment that may have to be complied with.Registering a Single Proprietorship
  4. 4. Register the business name with the department of trade and Industry under the bureau of domestic trade 2 pcs 2*2 picture Application free or registration fee of P110.00Registering a Partnership Preparing partnership agreement File the partnership agreement with the SEC Evaluating of the application by the lawyer and staff of corporate and legal department Release of approved registration is within 15-30 daysRegistering a Corporation Prepare articles of incorporation and by-law, bank certification File articles if incorporation and by- laws with the SEC File registration fee Evaluating of application by lawyer and staff of corporate and legal department Release of approved registration is within 15-30 daysRegistering a cooperative The following documents shall be forwarded to CDA; Four (4) copies of the economic survey with a general statement describing briefly he structure, purpose, economic feasibility, area of operation, size of memberships, and other pertinent data. Four (4) copies of article of incorporation together with he bond of accountable officers. Four(4) copies by by-laws Registration fee as prescribed by CDADealing with local government units The papers or documents issued by DTI, SEC, and CDA upon approval of the registration areinstrument which are national in character. To be able to finally operate the business and open the doors to the public, the entrepreneurs haveto comply with all the permits and clearances imposed by legal government units. These are thefollowing; Mayor’s permit Building permit Sanitary permit Cigar and liquor permit NBI clearance Barangay clearanceDealing with other government and private bodies Agencies like DENR and DEPED may have to be consulted for their requirement to therequirement to the registering organization. The entrepreneur’s own neighborhood may likewise oppose abusiness proposition within the village or subdivision.The Best Form of Ownership
  5. 5. The summary of the pros and cons of various form of business organization is shown below. Itwould you give the entrepreneur the chance to evaluate his option; PROPRIETORSHIP PARTNERSHIP CORPORATIONADVANTAGES1.Simplicity in creation 1.Ease of establishment 1.limited liability of stockholder2.low cost to establish 2.division of profits based on 2.ability to attract larger amount partnership agreement of capital3. owner receives all profits 3. larger pool of capital than 3.ability to have perpetual proprietorship4.owner retains all decision- 4.larger pool talent than 4.Ease of transfer of ownershipmaking authority proprietorship5.no special legal restriction 5.ability to attract limited 5.larger pool of skills, talent, and partners knowledge 6.little government regulation 6.Potential for economiles of scale

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