3. OWNERSHIP IS A LEGAL TERM
= IT MEANS THE LEGAL TITLE TO A
THING OR CONTROL OVER THE
THING OWNED.
= THE RIGHT OF THE POSSESSION
(OF THE ASSETS OF THE ENTERPRISE)
= THE POWER TO DETERMINE THE
POLICIES OF THE OPERATION.
= THE RIGHT TO RECEIVE AND
DISPOSE OF THE PROCEEDS.
4. 3 BROAD CLASSIFICATION
OF BUSINESS ENTERPRISES
(or the TYPES OF OWNERSHIP
IN BUSINESS)
1) PRIVATE OWNERSHIP
2) PUBLIC OWNERSHIP
3) MIXED OWNERSHIP
5. 1) PRIVATE OWNERSHIP
= WHEN AN ENTERPRISE IS SO
ORGANIZED THAT PRIVATE
INDIVIDUALS EXERCISE
AND ENJOY THE RIGHTS AND
PRIVILEGES OF AN OWNER IN
THEIR OWN INTEREST.
6. 2) PUBLIC OWNERSHIP
= WHEN THE ORGANIZATION OF THE
ENTERPRISE IS EFFECTED
AND MANAGEMENT IS CONTROLLED
BY POLITICAL BODIES
AS A MUNICIPAL, PROVINCIAL, OR
NATIONAL GOVERNMENT
OR BY ANY INSTRUMENTALITY
CREATED BY THEM.
7. 3) MIXED OWNERSHIP
= EXISTS WHEN THE ELEMENTS OF
OWNERSHIP
ARE DIVIDED SUCH THAT
PRIVATE PERSONS
AND PUBLIC BODIES SHARE IN
THE
OPERATION OF THE SAME
ENTERPRISE.
8. 5 BASIC FORMS OF PRIVATE
OWNERSHIP
(OWNERSHIP & STRUCTURAL FORMS OF BUSINESS)
1. INDIVIDUAL OR SINGLE OR SOLE
PROPRIETORSHIP
2. PARTNERSHIP
3. COOPERATIVE ORGANIZATION
4. CORPORATION AND
5. CORPORATE COMBINATION
9. THE CHOICE DEPENDS UPON CAREFUL CONSIDERATION
OF A NUMBER OF FACTORS
A) THE NATURE AND THE SIZE OF THE BUSINESS TO BE
STARTED.
B) THE CAPITAL REQUIRED AND THE MEANS OF PROCURING
IT.
C) THE LENGTH OF TIME THE ENTERPRISE IS EXPECTED TO
OPERATED.
D) THE TECHNICAL CONDITIONS AFFECTING THE
ENTERPRISE.
E) THE TYPES OF PRODUCTS TO BE MANUFACTURED.
F) THE METHOD AND VOLUME OF PRODUCTION.
G) THE KIND OF MARKETS TO BE SUPPLIED AND METHODS
OF MARKETING.
H) THE COMPETITIVE NATURE OF THE CHOSEN INDUSTRY.
10. (1st) BASIC FORMS OF PRIVATE OWNERSHIP
(OWNERSHIP & STRUCTURAL FORMS OF BUSINESS)
1. INDIVIDUAL OR SINGLE OR SOLE PROPRIETORSHIP
= Ownership vested on (controlled by) one person.
= Small, requires but little amount of capital.
= Promotes the enterprise, gets together necessary land,
buildings, machinery and labor.
= Conducts the business in person.
= He owns the business outright.
Many enterprise start as sole proprietorship. Later they
expand into larger forms as business prospers and increased
resources of the owner permit.
11. Many enterprise start as sole proprietorship. Later they expand
into larger forms as business prospers and increased resources of
the owner permit.
12. BASIC FORMS OF PRIVATE OWNERSHIP
(OWNERSHIP & STRUCTURAL FORMS OF BUSINESS)
INDIVIDUAL OR SINGLE OR SOLE PROPRIETORSHIP
ADVANTAGES
1. It is easy to start and to
terminate.
(BUSINESS ORG. & MANAGEMENT)
2. Control or management lies
entirely in the hands of the
owner.
3. Only a small amount of capital
is required in starting.
4. Profits belong entirely to the
owner.
5. High credit standing.
DISADVANTAGES
(shortcomings)
(OWNER AND STRUCTURAL
FORMS OF BUSINESS)
1. Limited judgment and
wisdom.
2. Limited amount of capital.
3. Unlimited Liability.
4. Difficulties of Management.
13. BUSINESS ORGANIZATION AND MANAGEMENT
BUREAU OF COMMERCE
SECURITIES AND EXCHANGE COMMISSION
SOLE
PROPRIETORSHIP
PARTNERSHIP CORPORATION
1953 5,958 698 586
1954 6,675 681 605
1955 4,854 505 657
1956 4,106 596 927
1957 4,161 610 913
1958 4,623 694 968
1959 5,232 734 1,086
These figures present only part of the complete story. There are thousands upon
thousands of single proprietorships that never register with the Bureau of Commerce.
Ex. Sidewalk vendors, Sari-sari stores, balut-vendor, halo-halo especially during
summer, samalamig and many more.
14. (2nd) BASIC FORMS OF PRIVATE OWNERSHIP
2. PARTNERSHIP
As business expands and develops the inherent limitations and
disadvantages of a single proprietorship, lead to development of
other forms of ownership.
The Partnership organization is formed.
ARTICLE 1967 of the CIVIL CODE
Defines a PARTNERSHIP as an organization where “two or more
person bind themselves to contribute money, property, or industry to a
common fund with the intention of dividing the profits among
themselves.
CLASSIFIED INTO 2
1. AS TO OBJECT 2. AS TO LIABILITY
2 FORMS 2 FORMS
a. Universal=contribute all property a. General Partn.= (old)
b. Particular=acquire thru industry = contractual relationship
or effort b. Limited or Special Partn.
15. AGREEMENT AND CONTROL OF PARTNERSHIP
* Formed by oral or written agreement (shares and profits)
* (written) Reliable attorney officiate the signing
* (law) real property and capital above P.3,000.00 should
have a public document as evidence of the partnership
contract.
* Equal control of the business held jointly by the partners.
PROFITS AND LOSSES SHARING (IN WRITING)
RATIO 2:1 1Partner rcvd. 2/3(profit) shoulder 2/3(losses)
(w/o writing aggreement) Losses shared equally.
16. PARTNERSHIP
ADVANTAGES
1. IT COULD BE AS EASILY FORMED AS THE
SINGLE PROPRIETORSHIP.
(IN WRITING/ORAL)
2. THERE ARE MORE PERSONS TO CONDUCT
THE BUSINESS AND TO HANDLE ITS
PROBLEMS.
(CAN BE OPERATED ON LARGER SCALE)
3. A PARTNERSHIP HAS ACCESS TO GREATER
CREDIT FACILITIES.
(BANKS/CREDIT INST. WILLING TO LEND.
RAW MATERIALS AND SUPPLIES “CREDIT)
4. THE COMBINED ABILITITY AND
RESOURCES OF PARTNERS ARE A SOURCE
OF STRENGTH.
(COMBINED EFFORTS)
5. RETENTION OF VALUABLE EMPLOYEES.
( AS PARTNERS ALSO)
DISADVANTAGES
1. UNLIMITED LIABILITY OF PARTNERS.
(LAW- PARTNERS ARE LIABLE FOR ALL DEBTS)
2. DISAGREEMENT BETWEEN PARTNERS
OFTEN LEAD TO DELAY AND
DIFFICULTIES WHICH COULD
ENDANGER THE ENTERPRISE.
3. EASY DISSOLUTION.
(DEATH, INSANITY AND INSOVENCY OF A
PARTNER AUTOMATICALLY DISSOLVES THE
PARTNERSHIP)
4. FROZEN INVESTMENT.
(EASY TO INVEST BUT DIFFUCULT TO WITHDRAW
THE FUNDS)
17. THE LIMITED PARTNERSHIP
TO AVOID THE UNLIMITED LIABILITY OF ALL THE GENERAL PARTNERS
IN A GENERAL PARTNERSHIP, THE LIMITED PARTNERSHIP WAS
EVOLVED.
2 KINDS OF PARTNERS
1. GENERAL PARTNERS
= 1 OR MORE PARTNERS IN A LIMITED PARTNERSHIP
MUST BE GENERAL PARTNERS, WHO HAVE UNLIMITED
LIABILITY.)
2. THE SPECIAL PARTNERS OF LIMITED PARTNERS
= WITH A LIMITED LIABILITY UP TO THE EXTENT OF THEIR
INVESTMENT.
= THEY TAKE NO ACTIVE PART IN THE MANAGEMENT.
= THEY CONTRIBUTE CAPITAL BUT THEIR NAME DOES NOT
APPEAR.
18. THE LIMITED PARTNERSHIP
ADVANTAGES
1. THERE IS A SINGLE
DIRECTION OF
MANAGEMENT,
THUS THERE IS UNITY AND
PROMPT ACTION.
2. THE LIMITED LIABILITY OF
SPECIAL OR LIMITED
PARTNERS,
SERVES AS GOOD
INDUCEMENT
DISADVANTAGES
1. The unlimited power given to general
partners may result in abuse.
The special partners could not interfere in
the management of the partnership even
if there is inefficiency in management.
Only when FRAUD exits or when there are
clear violations of the partnership
agreement.
2. There is the possibility of collusion among
the general partners to defraud the
creditors and the limited or special
partners.
19. KINDS OF PARTNERS
1. GENERAL PARTNER (DEFINED)
2. LIMITED PARTNER (DEFINED)
3. CAPITALIST PARTNER = CONTRIBUTES Money or Property.
4. INDUSTRIAL PARTNER = Services, Talents, Skills, and Abilities
but not property.
5. MANAGING PARTNER =ADMINISTERS the operations.
MANAGES business directly.
6. LIQUIDATING PARTNER =HANDLES the affairs of the
dissolution of the business.
7. OSTENSIBLE PARTNER =Publicly makes known his
connections with a partnership.
8. SECRET PARTNER =Not Publicly made known.
9. SILENT PARTNER =Is Not Given a Voice in the
Management.
10. DORMANT PARTNER =Secret and Silent.
11. NOMINAL PARTNER =For Prestige Purpose Only.
20. A PARTNERSHIP IS DISSOLVED
BY :
1. DEATH OR INSOLVENCY
OR INSANITY.
2. EXPULSION IN GOOD
FAITH.
3. INABILITY
21. PARTNER :
SENIOR JUNIOR
* A general partner who has a
substantial investment in the firm.
* Receives a relatively larger
percentage of the profits.
* By virtue of age and years of
association with the firm, assumes a
major role in the management .
(Opposite of a Senior Partner)
*A young man
*Recently Admitted
*Small Investment
*Minor share-profit
*Minor Decision
Making
22. (3rd)BASIC FORMS OF PRIVATE OWNERSHIP
(OWNERSHIP & STRUCTURAL FORMS OF BUSINESS)
3. COOPERATIVE ORGANIZATION
A Cooperative association has some elements of a
large partnership and also many features of a corporation.
Principal Theory:
Elimination of profit as the
controlling motivation and reduction
of certain economic evils.
Under the Cooperative System,
enterprises are formed:
To provide goods and
service, to the members at cost.
23. From a point of view of ownership
A Cooperative is a business
org. w/c is owned by the
people it serves.
Owners are also customers
A simple asso./ chartered org.
Members buy shares.
(amt. limited in the by-laws)
Operated/Conducted;
Same was an ordinary profit-making
company operates.
Profits accrue;
Returned to the members
not on the basis of ownership but
of participation.
24. KINDS OF COOPERATIVE ORGANIZATION
( 4 GENERAL CLASSIFICATION)
1. THE CONSUMER’S COOPERATIVE
Members = from gen’l.public.
Retail Trade Operation = grocery, cloth store, gasoline station
*Barber shop coop. *restaurant coop. *transport. Coop.
2. THE PRODUCERS’ COOPERATIVE
Members = producers of grains and other farm products.
livestock, fruits and dairy products.
Wholesale = eliminates middleman’s profit.
3. THE MARKETING COOPERATIVE
Closely related to producers’ coop. (eliminates middle man)
Ex. Batangas Citrus Growers & FACOMAS(farmer) have coop to sell.
4. THE FINANCING COOPERATIVE
THE CREDIT UNION often called the “poor man’s bank” small means, low interest
*Building & Loan Asso. *Savings and Loans Asso. *Credit Unions
(Fraternal Benefit Asso & INSURANCE=fire,health,life,autos’ employs coop.principle
but not all)
25. PRIVILEGES OF COOPERATIVES
(SECTION 5) Cooperatives shall enjoy;
(a) Exemption from income taxes and sales taxes
net income returned to members.
(b) areas-cooperative, right to supply rice, corn, grains etc.,
concerned to State Agencies administering price
stabilization programmed.
(c) Exemption from the application of the Minimum Wage
Law upon the recommendation of the Bureau of Coops.
Devt. subject to the approval of the Secretary of Labor.
26. BASIC FORMS OF PRIVATE OWNERSHIP
(OWNERSHIP & STRUCTURAL FORMS OF BUSINESS)
27. 4th BASIC FORMS OF PRIVATE OWNERSHIP
(OWNERSHIP & STRUCTURAL FORMS OF BUSINESS)
4. CORPORATIONS
An artificial being created by operation of law having the right
of succession and the powers, attributes, and properties, expressly
authorized by law or incident to its existence.
In advanced countries (USA)
Corporate form of business ownership dominates the mfg. And
commercial fields
The Trend Towards Corporate Organization (Philippines)
More and more individual proprietorships and partnerships are
turning to incorporation as a preferable form of conducting
business.
28. NATURE AND CHARACTERISTICS OF A
CORPORATION
1. It is an artificial business unit,and its creation is
through the process of law. (legal existence)
2. The basic structure of a corporation is simple.
(operates thru delegated authority and responsibility)
3. The corporation organization is of wide scope.
(stands for group activity and combined investment of the
members)
4. The existence of a corporation is practically permanent by operation of
law (term of life limited-to a period of years subject to renewal/
terminated-misuse,nonuse, nonperformance obligations to the state
5. The function of a corporation is public.
• (The existence is for the benefits of the public or society. While the
• ownership and purpose may be for private profit.)
29. KINDS OF PRIVATE CORPORATION
1. STOCK CORPORATION
*
= Is one which the capital stock is divided into shares,
authorized to distribute ..
dividends to the holders of
the shares, or allot the surplus profit on the basis of
the shares.
2. NON-STOCK CORPORATION
= Is one in which the capital stock is not so divided
It issues certificates of stock which in reality are
merely certificates of memberships.
30. These certificates cannot be transferred except to members
and only upon the members’ death.
Stockholders of a stock corporation are issued certificates
of stock which are written acknowledgements by the corporation
of the stockholders’ interest in the corporation and its property.
The stock itself, however, is the proportionate unit of the
capital stock and represents the interest of the owner in the
management, surplus, profits, and in the property and assets after
dissolution and payment of liabilities.
ARTICLES OF INCORPORATION (approved by the SEC)
= The authorized capital stock of a corporation
(STOCK)
“SUBSCRIBED” = When stockholders agree to take some of the
capital stock and to pay for it.
“PAID-UP CAPITAL” = Once it is paid for.
32. THE COMMON STOCK
*Is the ordinary stock representing the basic ownership
PAR VALUE=is the amount printed on the stock certificate.
*A corporation may elect to issue common stock with an assigned
face value(par) of w/o an assigned face value(no par) stock.
*P5, P10 being common values(par values) impt. In determining-dividends
*does not represent its true market value. (par v.=P.10,000) (property
P.7,000 only)
*CORP.20years in business (par value=P.100) = (sell for = P.1,000 each
in market)
NO PAR STOCK
*In the case of non-par stock, the corporation is not compelled to sell
the stock at any particular price, for instance no-par stock may have
sold for P.60.00
*Since money is needed the company can sell at P. 40.00
33. THE PREFERRED STOCK
=As its name implies, gives the owners special protection or advantages
over the common stock holders.
CLASSIFICATION OF PREFERRED STOCK
1. PREFFERED AS TO DIVIDENDS (certain agreed dividend)
2. PREFERRED AS TO ASSETS (in case of dissolution)
3. PREFERRED AS TO BOTH DIVIDENDS AND ASSETS
4. CUMULATIVE PREFERRED (preferred dividends for the past year will-paid 1st. )
5. CALLABLE (retired any time or at a specific time in the certificate then it is)
6. CONVERTIBLE (converts the callable pref.stock to common stock)
FINANCING INSTITUTION (GSIS,SSS)
= insist the right to vote for their preferred shares and also ask to have a
representative sit on the corporation board of directors.
THE USUAL LEGAL STATUS OF PREFERRED STOCK
Is that it is cumulative as to dividends, non-participating and possesses voting power.
34. CORPORATE OWNERSHIP AND CONTROL
*THE ULTIMATE CONTROL OF THE CORPORATION RESTS
IN THE HANDS OF THE STOCKHOLDERS.
ADVANTAGES
OF THE CORPORATION
1. EASE OF ACQUIRING
LARGE AMOUNT OF
CAPITAL
2. FLEXIBLE OWNERSHIP
3. LIMITED LIABILITY OF
STOCKHOLDERS
4. MORE OR LESS
PERMANENT EXISTENCE
5. LEGAL ENTITY
DISADVANTAGES OF
CORPORATE OWNERSHIP
1. ORGNIZATIONAL
EXPENSES
2. GOV’T. RESTRICTIONS
AND REPORTS
3. LACK OF PERSONAL
INTEREST
4. LACK OF SECRECY
35. 4th BASIC FORMS OF PRIVATE OWNERSHIP
(OWNERSHIP & STRUCTURAL FORMS OF BUSINESS)
5. THE CORPORATE COMBINATION
=THE COMBINING OF TWO OR
MORE CORPORATIONS.
=UNDER THE CONTROL OF ONE
OWNERSHIP INTEREST.
36. AMONG
THE
CORPORATE COMBINATIONS
THAT MAY BE MENTIONED
ARE
THE MERGER,
AND THE TRUST.
37. THE
MERGER
THE TRUST
=SOMETIMES
CALLED
“INTEGRATION”.
=THE UNION
EFFECTED BYTHE
ABSORBING OF ONE
OR MORE EXISTING
CORPORATIONS
BY ANOTHER
BY WHICH
SURVIVES AND
CONTINUES
THE COMBINED
BUSINESS.
=HAD ITS ORIGIN
IN A PRINCIPLE
OF LAW
ORIGINALLY
DEVELOPED
FOR
SAFEGUARDING
THE PROPERTY
OF MINORS
AND OTHER
PERSONS
NOT ABLE
OR WILLING
TO ADMINISTER
THEIR OWN
AFFAIRS.
