4 FORMS OF BUSINESS
ORGANIZATION?
Sole Proprietorship
Partnership
Corporation
Cooperatives
It is a business owned and operated by single person.
sole/single proprietorship
Unique advantages of a Sole Proprietorship
-ease and cost formation
-secrecy
-distribution and use of profits
-control of the business
-government regulations
-taxation
-closing the business
is spared from various
government rules
which cover partnerships and
corporations.
sole proprietorship
The net income of
the sole proprietorship is regarded as
the personal income of
the sole owner and
is taxed accordingly.
Disadvantages of Sole
Proprietorship
-Possibility that the owner lacks ability and experience;
-Difficulty in raising additional capital;
-Limited life of the firm; and
-Unlimited liability of the proprietor.
Is an association of two or more persons who have agreed to contribute money, property , or industry to a common fund with the intention of dividing the profits among themselves.
partnership
Two or more persons may for a partnership for the exercise of a profession.
partnership
Such partnership are called
general professional partnership
The owners of a partnership are called
partners
example of partnership
-Law Firms
-Certified Public Accountants
-Medical Clinics
Easier to form than a corporation.
partnership
partnership may be composed of
two partners only or DOZENS of partners
It is contractual in nature because it is
formed through a contract between or
among the partners.
partnership
partnership can be formed by
either an oral contract/agreement or by a written contract/agreement
does partnership require a written contract/agreement
NO
Essential Requisites of a
Partnership
-Contract Partnership which may be oral or written
-Two or more persons who have the legal capacity to enter into contract of partnership
-Valuable contribution to a common fund which may consist of money, property or industry
-An intention to divide the profits between or among the partners; and
-Lawful purpose (s)
7 characteristics of a Partnership
-Mutual agency
-Voluntary association
-Based on contract
-Limited life
-Unlimited liability
-Division of profit
-Co-ownership of contributed assets.
Advantages of Partnership
-Ease of Information
-Allows pooling of financial resources
-Allows pooling of skills, expertise, and experience of partners
-Less government control, supervision and intervention.
Is an artificial body organized in accordance with the provision of law in which ownership is divided into shares of
stocks.
corporation
how many person are required to organize a corporation
five or more (including the incorporators)
incorporators are called
shareholders or stockholders
evidence of investments
stock certificates
are the written evidence
representing ownership in a corporation.
stock certificates
