Lesson 6- THE BUSINESS

ORGANIZATI0N
Identify the following whether it is ;

 Sole Proprietorship

 Partnership

 Corporation
 Objectives
At the end of this lesson, the students will be
able to:
1. identify the forms of business organization
2. enumerate the types of business organized
under foreign laws, and
3. discuss the types of business.
There are three types of business
organizations based on- ownership structure.
These are sole proprietorship, partnership,
and corporation. A wise manager should
consider the characteristics of the business
organization that he or she wishes to establish
in making the business plan as each presents
unique advantages, opportunities and
challenges.
SOLE PROPRIETORSHIP
Sole proprietorship are
companies owned by one who
is usually hands-on in managing
the day-to-day activities.
Many small businesses start in
this type of business
ownership. Sole proprietors
own the entire business,
including all assets and profits.
Assets are resources with
economic value that are owned
and controlled by the business
owners. Examples of assets are
facilities, equipment, machinery,
cash, office supplies and row
materials
SOLE PROPRIETORSHIP
Liabilities are debts or obligations
which arise in the course of the
business operations. Examples of
liabilities are accounts payable,
notes payable, accrued liabilities,
bonds payable.
 Advantages and disadvantages of a Sole Proprietorship

The main advantage of a sole

proprietorship is that it is the most
manageable and least expensive form of
ownership. Proprietors have complete
control over the business and can make
decisions based on their own judgment.
 Advantages and
Disadvantages of a Sole Proprietorship

The main advantage of a sole

proprietorship is that it is the most
manageable and least expensive form of
ownership. Proprietors have complete
control over the business and can make
decisions based on their own judgment.
 Partnership

Partnershipis a form of business

organization where ownership of
the business is shared by two or
more members.
 Partnership

The partners mutually agree

as to how decisions will be
made and how the profits and
losses will be shared.
 Two Forms of Partnership
General Partnership- is a form of
partnership wherein the partners
have unlimited liability for the
debts and obligations of the
partnerships
 Two Forms of Partnership
Limited Partnership- is a form of
partnership wherein one or more
general partners have unlimited
liability and the limited partners have
liability that is only up to the amount
equal to their capital contributions.
 Advantages of Partnership

One of the advantages of a partnership is

its wider capital base. Having more
partners involved in the business allows
for diversification of the contributed
monetary funds, skills, and resources.
 Disadvantages of a Partnership

Partners are jointly liable

for all the obligations and
effects stemming from
the decisions of the other
partners.
 Disadvantages of a Partnership

Partnerships have a
limited life because
of its general
instability.
 Disadvantages of a Partnership

This instability is not referring

to business unprofitability but
rather to several internal factors
which make the partnership
vulnerable to dissolution
 CORPORATION
The third form of business
organization is the corporation. A
corporation has a distinct
personality separate and distinct
personality separate from its
owners.
 CORPORATION

A corporation has a
minimum of five and a
maximum of fifteen
owners who are called
shareholders.
 CORPORATION

Each shareholder owns a

part of the company and
has authority over its
direction
 Advantages of a Corporation

One of the advantages of

a corporation is its
limited liability to its
shareholders.
 Advantages of a Corporation
It also has a general
stability since the death or
withdrawal of one
shareholder does not result
in its dissolution.
 Classification of Business
Business can also be
classified based on the
type of products or
services rendered.
 Service Business
Is a type of business that
provides labor and other
services to customers.
Examples;
Transportation companies
Professional services
Entertainment
Telecommunication services
Media
 Merchandising Business
Is a type of business that
purchases products from
other businesses like
manufacturing and sells
them to customers at a
higher retail price.
 Examples;
Grocery Stores
Supermarkets
Car dealers
Real estate dealers
Electronic store
Manufacturing Business
 Is a type of business where raw materials are
transformed into finished goods, through product
processing
 Labor
 Other manufacturing processes
 manufacturers of soap and detergent
 canned goods
 automobiles
 medical drugs
 Activity 5: Individual
Give 10 examples of Service
Business in Masbate City
Give 10 examples of
Merchandising Business in
Masbate City