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Questions and Answers
Which scenario best illustrates a merchandising business?
Which scenario best illustrates a merchandising business?
- A retail store that purchases clothing from manufacturers and sells them to customers. (correct)
- A firm that provides financial consulting services to corporations.
- A bakery that produces and sells bread and pastries.
- A company that offers plumbing repairs to residential clients.
How can a sole proprietorship's structure affect the owner's personal liability?
How can a sole proprietorship's structure affect the owner's personal liability?
- The owner's liability is determined by the size and profitability of the business.
- The owner has unlimited liability, meaning their personal assets are at risk for business debts. (correct)
- The owner has limited liability, only up to the amount of their initial investment.
- The owner is only liable for debts if they are found to have acted negligently.
What is the primary aim of a business from a financial perspective?
What is the primary aim of a business from a financial perspective?
- To maximize social welfare and community development.
- To provide employment opportunities for individuals.
- To comply with all government regulations and legal requirements.
- To generate profit by ensuring revenue exceeds expenses. (correct)
In what way can the moral point of view influence a business organization's operations?
In what way can the moral point of view influence a business organization's operations?
Which of the following is a key characteristic that distinguishes a service business from a manufacturing business?
Which of the following is a key characteristic that distinguishes a service business from a manufacturing business?
A key advantage of corporations is the ability to easily raise additional capital. Which mechanism primarily facilitates this?
A key advantage of corporations is the ability to easily raise additional capital. Which mechanism primarily facilitates this?
In the Philippines, what legal framework primarily governs the nature, principles, and operations of cooperatives?
In the Philippines, what legal framework primarily governs the nature, principles, and operations of cooperatives?
According to the International Cooperative Alliance, what is the core characteristic of cooperatives?
According to the International Cooperative Alliance, what is the core characteristic of cooperatives?
Which of the following is typically considered a disadvantage of the cooperative form of business organization?
Which of the following is typically considered a disadvantage of the cooperative form of business organization?
One key characteristic of a corporation is that it is an independent legal entity distinct from its owners. What is the implication of this?
One key characteristic of a corporation is that it is an independent legal entity distinct from its owners. What is the implication of this?
Which form of business organization is characterized by single ownership?
Which form of business organization is characterized by single ownership?
Cooperatives often benefit from reduced operational costs. What contributes MOST to this advantage over other business structures?
Cooperatives often benefit from reduced operational costs. What contributes MOST to this advantage over other business structures?
What is a main drawback of corporations?
What is a main drawback of corporations?
Which of the following scenarios best illustrates a key disadvantage of a sole proprietorship?
Which of the following scenarios best illustrates a key disadvantage of a sole proprietorship?
A group of professionals wants to start a business where they can pool their resources and expertise, but they are concerned about the potential for personal liability. Which form of business organization would be most suitable, balancing these factors?
A group of professionals wants to start a business where they can pool their resources and expertise, but they are concerned about the potential for personal liability. Which form of business organization would be most suitable, balancing these factors?
A partnership is considering a major expansion that requires significant capital. Which of the following factors might pose the biggest challenge compared to a corporation?
A partnership is considering a major expansion that requires significant capital. Which of the following factors might pose the biggest challenge compared to a corporation?
Which of the following statements accurately distinguishes between general and limited partners in a partnership?
Which of the following statements accurately distinguishes between general and limited partners in a partnership?
A corporation is seeking to raise capital without incurring debt. Which method aligns with the characteristics of a corporation?
A corporation is seeking to raise capital without incurring debt. Which method aligns with the characteristics of a corporation?
Which of the following is a primary disadvantage of forming a corporation compared to a sole proprietorship or partnership?
Which of the following is a primary disadvantage of forming a corporation compared to a sole proprietorship or partnership?
Consider a scenario where a business owner wants to shield their personal assets from business liabilities while retaining significant control and decision-making power. Which business structure might present a challenge in achieving this balance?
Consider a scenario where a business owner wants to shield their personal assets from business liabilities while retaining significant control and decision-making power. Which business structure might present a challenge in achieving this balance?
A business is experiencing significant losses due to a major lawsuit. In which business structure would the owner's personal assets be most at risk?
A business is experiencing significant losses due to a major lawsuit. In which business structure would the owner's personal assets be most at risk?
Flashcards
Business
Business
An organization that combines resources to deliver goods or services to consumers.
Aim of Business
Aim of Business
To generate profit, the difference between received amount and spending.
Types of Business Organizations
Types of Business Organizations
Three categories: Service, Merchandising, and Manufacturing businesses.
Sole Proprietorship
Sole Proprietorship
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Advantages of Sole Proprietorship
Advantages of Sole Proprietorship
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Unlimited Liability
Unlimited Liability
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Partnership
Partnership
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General Partners
General Partners
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Limited Partners
Limited Partners
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Corporation
Corporation
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Limited Liability
Limited Liability
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Corporate Regulation
Corporate Regulation
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Regulatory Authority
Regulatory Authority
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Stock Market Listing
Stock Market Listing
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High Income Tax Rate
High Income Tax Rate
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Cooperative
Cooperative
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Philippine Cooperative Code
Philippine Cooperative Code
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Advantages of Cooperatives
Advantages of Cooperatives
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Disadvantages of Cooperatives
Disadvantages of Cooperatives
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Study Notes
Business Ethics
- Focuses on the moral principles and values that guide business decision-making.
- It encompasses honesty, fairness, and responsibility in business dealings.
- Involves creating a balance between profit and societal well-being.
Nature and Forms of Business Organizations
- Different legal structures for businesses: sole proprietorship, partnership, corporation, and cooperative.
- Each structure has unique ownership characteristics and legal implications.
Objectives
- To define business, understand motivations for business endeavors, outline advantages/disadvantages of various business models, design an individual business and its logo, and categorize business features.
Definition of Business
- Business is an active, integral component of human society.
- It's an organization that brings economic resources (materials, services) together, distributing goods and services to consumers.
Aim of Business
- Profit is a primary goal for business operations, representing revenue minus expenditures.
Profit
- Profit is the difference between the amount of revenue received and the expenses incurred for a product or service.
Moral Point of View
- Businesses ought to contribute to the common good and safeguard individual rights.
Types of Business Organizations
- Service Businesses: Provide services rather than products (e.g., tutoring, computer repair).
- Merchandising Businesses: Sell products purchased from other businesses (e.g., supermarkets, bookstores).
- Manufacturing Businesses: Transform inputs into products for sale (e.g., food production, clothing manufacturing).
Three Basic Forms of Business Ownership
- Sole Proprietorship: Simple business structure with one owner responsible for all business aspects.
- Partnership: Two or more individuals combine resources and expertise.
- Corporation: Complex structure where the business is an independent entity distinct from its owners.
Sole Proprietorship
- Simplest business form, with one owner handling all aspects of the business.
- Suitable for small-scale ventures.
- Limited capitalization and personal liability is a significant disadvantage.
Partnership
- A business venture involving two or more individuals.
- Easier to establish compared to other organizational structures.
- Can raise more capital than sole proprietorships but partnerships may not be as stable or have as much continuity without proper arrangements.
Types of Partnerships
- A partnership may have general partners and limited partners. General partners participate and are liable for debts, while limited partners invest but have limited involvement.
Corporation
- Business entity separate from its owners.
- Offers limited liability to shareholders.
- Increased capital is easier to obtain through markets.
- More complex to establish and maintain than sole proprietorships or partnerships.
- Subject to greater government oversight compared to other structures.
Cooperative
- New organizational form.
- Governed by specific legislation in the Philippines.
- Members jointly own and democratically control the enterprise.
- Often more tax efficient.
- Often associated with fewer opportunities to raise larger amounts of capital.
Advantages of Cooperatives
- Often subject to less taxation than other forms of business.
- Can have greater access to funding compared to sole proprietorships or partnerships.
- Can operate at significantly lower costs.
- Generally perpetual in nature, offering stability compared to other business structures.
- Democratized managerial structures, making them more responsive to member needs.
Disadvantages of Cooperatives
- There can be a lack of membership participation and leadership participation.
- Management can sometimes be inefficient as it's usually comprised of volunteers.
- Potential for internal conflicts or infighting among members.
- Limited capitalization compared to corporations.
Business and Socio-economic Development
- Businesses drive economic advancement and standard of living.
- They create job opportunities and shape social practices.
- Powerful business figures can influence politics beyond the economic sphere.
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Description
Explore business ethics, emphasizing moral principles, honesty, and societal well-being. Investigate organizational structures like sole proprietorships, partnerships, which shape ownership and legal implications, and define aims of business.
