Lesson 4: Forms of Business Organization

Question 1

The simplest form of business

o Owner has full control and authority to make decisions for the business;
* All profits go to the owner;
* Owner is solely liable for all business risks and losses;
* Business and owner are merged in one person and are taxed as one person. Individual tax
rates apply;
* Foreigners may form single proprietorship business in the Philippines in industries where
the Constitution and the laws do not impose any restriction or limitation on ownership
equity;

Answer 1

Sole Proprietorship

Question 2

Ease of formation (registration with the Department of Trade and Industry); o Owner
has full control, authority and responsibility over all the assets and liabilities of the
business;

Answer 2

Sole Proprietorship