Law on Business Organizations for TM

1. Law on
Partnership and
Corporation
Legal Aspects in Tourism and Hospitality

2. 01
To differentiate the different types of
business organizations - a single
proprietorship, a partnership, a corporation
and a cooperative.
Learning Objectives
02
03
To identify different kinds of partners,
partnerships, corporation and cooperative.
To be able to understand the governing
laws on business organizations based on
Civil Code of the Philippines, Revised
Corporation Code of 2019 and Cooperative
Code of the Philippines.

3. The Law on Partnership is governed by the
Civil Code of the Philippines while the Law
on Corporation is governed by Batas
Pambansa Blg. 68, Corporation Code of the
Philippines.
Forms of Business Organizations
1. Single proprietorship 3. Corporation
2. Partnership 4. Cooperative

4. Forms of Business Organizations
1. SINGLE/SOLE PROPRIETORSHIP BUSINESS ORGANIZATIONS
— A sole proprietorship is a form of business organization with only
one proprietary owner, a single individual who conducts business
under his own name or a business name (p.3, Commentaries and Jurisprudence on
the Revised Corporation Code of the Philippines, Aquino, 2020)
•SOLE PROPRIETORSHIP VS. ONE
PERSON CORPORATION
— The One Person Corporation (OPC) and
Sole Proprietorship may sound similar but they
have unique provisions, exceptions, and
structure that only applies to each one.
•WHO CAN BE SOLE PROPRIETORSHIPS?
— A sole proprietorship is best suited to small
businesses with low risk and low profits.
•BENEFITS OF SETTING UP A SOLE
PROPRIETORSHIP IN THE PHILIPPINES

5. Forms of Business Organizations
2. PARTNERSHIP BUSINESS
ORGANIZATIONS
According to Article 1767 of the Civil Code of the Philippines
ART. 1767. By the contract of partnership two or more persons bind
themselves to contribute money, property, or industry to a common fund,
with the intention of dividing the profits among themselves.
PRINCIPLE OF DELECTUS
PERSONAE
•CHARACTERISTICS OF
PARTNERSHIP
1. Ease of formation
2. Mutual contribution
3. Division of profits or losses
4. Co-ownerships of contributed assets
5. Mutual agency
6. Limited life
7. Unlimited liability
8. Income taxes
•ELEMENTS OF PARTNERSHIP
1. Consensual
2. Bilateral
3. Onerous
4. Commutative

6. Forms of Business Organizations
•CLASSIFICATIONS OF PARTNERSHIP
1. According to object
a.) Universal partnership of all present
property
b.) Universal partnership of all profits
2. According to liability
a.) General partnership
b.) Limited partnership
3. According to duration
a.) At will
b.) With a fixed term
4. According to purpose
a.) Commercial/ trading
b.) Profession/ non-trading
5. According to legality of existence
a.) De jure partnership
b.) De facto partnership
•KINDS OF PARTNERS UNDER CIVIL
CODE
1. Capitalist 6. Liquidating
2. Industrial 7. By estoppel
3. General 8. Continuing
4. Limited 9. Surviving
5. Managing 10. Sub-partner
•ADVANTAGES AND DISADVANTAGES

7. Forms of Business Organizations
3. CORPORATION BUSINESS ORGANIZATIONS
Corporation Code of the Philippines
Sec 2. Corporation defined - a corporation is an artificial being created by
operation of law, having the right of succession and powers, attributes and
properties expressly authorized by law or incident to its existence.
“Right of succession" means that a corporation has
a capacity to exist regardless of the DEATH,
WITHDRAWAL, INSOLVENCY, or INCAPACITY of
the individual stockholders and regardless of the
transfer of interest or shares of stock.

8. Forms of Business Organizations
•KINDS OF CORPORATION
A. Stock corporation
B. Non-stock corporation
C. Corporation de jure
D. De facto corporation
E. Public corporation
F. Private corporation
G. Eleemosynary corporation
H. Domestic corporation
I. Foreign corporation
•COMPONENTS OF A
CORPORATION
1. Corporators
2. Incorporators
3. Stockholders or shareholders
4. Members
5. Promoters
•ADVANTAGES AND DISADVANTAGES

9. Forms of Business Organizations
4. COOPERATIVE BUSINESS
ORGANIZATIONS
An act amending the Cooperative Code of the Philippines to be known as the “Philippine Cooperative
Code of 2008”
•ART. 3. General Concepts. – A cooperative is an autonomous and duly registered association of
persons, with a common bond of interest, who have voluntarily joined together to achieve their social,
economic, and cultural needs and aspirations by making equitable contributions to the capital required,
patronizing their products and services and accepting a fair share of the risks and benefits of the
undertaking in accordance with universally accepted cooperative principles.
•ART. 4. Cooperative Principles. – Every cooperative shall conduct its affairs in accordance with
Filipino culture, good values and experience and the universally accepted principles of cooperation
which include, but are not limited to, the following:
1. Voluntary and Open Membership 4. Autonomy and Independence
2. Democrative Member Control 5. Education, Training and Information
3. Member Economic Participation 6. Cooperation Among Cooperatives
4. Autonomy and Independence 7. Concern for Community
•ART. 6. Purposes of Cooperatives