L2; Forms of Business Ownership Flashcards
WHAT ARE THE 4 FORMS OF BUSINESS ORGANIZATION? (differentiate them briefly)
- Sole Proprietorship
- Partnership
- Corporation
- Cooperatives
It is a business owned and operated by single person.
SOLE /SINGLE PROPRIETORSHIP
enumerate the Unique advantages of a Sole Proprietorship
- Ease and Cost Formation
- Secrecy
- Distribution and Use of Profits
- Control of Business
- Government Regulations
- Taxation
- Closing the Business
The only requisites for the legal existence to commence are the following:
1. The owner’s resolution to start operating; and
2. Getting the required permit and license.
(which advantages of Sole Proprietorship is the statement under)
- Ease and Cost Formation (sole proprietorship)
is spared from various government rules which cover other forms of businesses
Sole proprietorship
The ______ income of this form of business is regarded as the ______________ income of the sole owner and is taxed accordingly.
The net income of the sole proprietorship is regarded as the personal income of the sole owner and is taxed accordingly.
In the case of what forms of businesses do the net income get taxed and will be subject to taxation again when the owners individually receive their share of profits?
partnership and corporations
Enumerate the 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
in a partnership, two or more persons have to agree to contribute what to the common fund?
- money,
- property , or
- industry
Two or more persons may form a partnership for the?
exercise of a profession
Two or more persons may form a partnership for the exercise of a profession, what is that partnership called?
GENERAL PROFESSIONAL PARTNERSHIP
The owners of a partnership are called?
partners
Example of Partnership
- Law Firms
- Certified Public Accountants
- Medical Clinics
It may be a small firms selling goods or services at a single locations, or a larger enterprise selling goods or services at different locations.
Partnership
How many people are in a partnership?
2-12
It is contractual in nature because it is formed through a contract between or among people.
partnership
The partnership can be formed by either?
an oral contract /agreement OR by a written contract/agreement.
A written contract agreement is not required in a?
Partnership
A written contract agreement is not required in a partnership, all that is needed is that?
the partners agreed to form the partnership and are amendable to the terms of the agreement.
Enumerate the 5 essential requisites of the partnership form of organization
CTVAL
- 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)
Enumerate the 7 characteristics of a Partnership
- Mutual agency
- Voluntary association
- Based on contract
- Limited life
- Unlimited liability
- Division of profit
- Co-ownership of contributed assets.
Enumerate the Advantages of Partnership
EAAL
- Ease Formation
- 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
in a corporation, ownership is divided into?
shares of stocks.
Incorporators are called what in a corporation?
SHAREHOLDERS or STOCKHOLDERS.
Evidence of investment in a corporation are called?
STOCK CERTIFICATES
are the written evidence representing ownership in a corporation.
STOCK CERTIFICATES
What are the Characteristics of a Corporation
ST 3Cs
- Separate legal existence
- Created by operation of law
- Transferable units of ownership
- Continuity of existence
- Centralized management by the BOD- elected through stockholders meetings.
The corporation is a legal or juridical entity separate and distinct from its owners.
(which Characteristics of a Corporation is the statement under)
Separate legal existence
it requires authority given by the government
(which Characteristics of a Corporation is the statement under)
Created by operation of law
Ownership of a corporation is divided into transferrable units called SHARES OF STOCKS as evidence of stock certificate
(which Characteristics of a Corporation is the statement under)
Transferable units of ownership
liable only up to the extent of shares subscribe by them.
(which Characteristics of a Corporation is the statement under)
Limited Liability (corporation)
Initially, the life of the corporation is? and extension of another?
Initially, the life of the corporation is 50 years, and extension of another 50 years.
Although people often describe this as being distinct from a corporation, this business structure is, in reality, a type of corporation.
Cooperative
What sets a cooperative apart from other types of corporations is?
who the owners of the company are.
While other types of corporations are owned by shareholders or stockholders, co-ops are owned by?
its members or the people who use the services of the cooperative. Some cooperatives are employee-owned.
To become a member of a cooperative, a person must?
To become a member of a cooperative, a person must make a financial contribution.
The focus of co-ops is on?
building and maintaining community (most exist to meet the specific needs of their members. )
The opinions and votes of each member in a co-op are treated?
equally
Any profits the cooperative earns are?
either re-invested in the company, similar to a nonprofit corporation, or distributed among its member-owners, as with a for-profit corporation.
IN WHAT SECTORS CAN COOPERATIVES BE FOUND?
You’re likely to find the co-op model in a variety of economic sectors, including:
1. Agriculture
2. Financial services
3. Education
4. Healthcare
5. Housing
6. Groceries
7. Utilities
8. Worker
9. Purchasing
As a _______________________, a cooperative is similar to a corporation.
juridical entity
Corporations are registered and supervised by?
Securities and Exchange Commission (SEC)
Cooperatives are registered and supervised by and what is it pursuant to?
Cooperative Development Authority (CDA)
This is pursuant to the Philippine Cooperative Code of 2008 (Republic Act No. 9520).
where are sole proprietorships registered?
Register a business name with The Department of Trade and Industry (DTI) to acquire a DTI Certificate of Registration
for local licenses:
Register with the Barangay Office where the business is going to be located to acquire a Barangay Certificate of Business Registration; Register with the Mayor’s Office to acquire a Mayor’s Permit; and. Register with the Bureau of Internal Revenue (BIR) to acquire a Certificate of Registration.
what are the requirements(?) in organizing a primary cooperative.
- Fifteen (15) or more natural persons,
- are Filipino citizens,
- of legal age,
- having a common bond of interest and
- are actually residing or working in the intended area of operation
A prospective member of a primary cooperative must have?
completed a Pre-Membership Education Seminar (PMES).
Cooperatives file its? Which must be signed by?
Cooperatives file its Articles of Cooperation, which must be signed by each of the organizers and acknowledged before a notary public.
Corporations which seek to register must file its?
Articles of Incorporation
Total amount earned in the business
Revenue
Partnerships are required to be registered in?
Securities and Exchange Commission (SEC)
https://companyincorporation.com.ph/philippines-business-registration/partnership.php
other term for SHAREHOLDERS or STOCKHOLDERS.
INCORPORATORS
