Introduction to Business Organization: Forms and Characteristics

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Questions and Answers

What is the main goal of for-profit organizations?

To create job opportunities for the local community

To make a profit to sustain the business (correct)

To advocate and implement activities for public interest

To develop products and supply them to consumers

What distinguishes nonprofit organizations from for-profit organizations?

They advocate and implement activities for public interest (correct)

They aim to make a profit to sustain the business

They create job opportunities for the local community

They develop products and supply them to consumers

What is the primary characteristic of a sole proprietorship?

Owned and operated by multiple individuals

Requires a large amount of capital to start

Operated by one individual who makes all decisions related to the business (correct)

Has no need for DTI registration

What distinguishes a nonprofit organization from a for-profit organization in terms of ownership?

No one person owns or controls a nonprofit organization Signup and view all the answers

What is the main difference between a general partner and a limited partner in a partnership?

A general partner has unlimited liability, while a limited partner has liability up to the extent of their capital contributions Signup and view all the answers

According to Article 1772, what is the requirement for every contract of partnership having a capital of 3,000 pesos or more?

It must be recorded in the office of the securities and exchange commission Signup and view all the answers

What type of corporation is San Mig and PLDT classified as?

Stock - Profit Signup and view all the answers

According to Republic Act No.11232, who can form a one person corporation?

Only a natural person, trust, or an estate Signup and view all the answers

Under what conditions is a contract of partnership void according to Article 1773?

When immovable property is contributed and an inventory is not made and attached to the public instrument Signup and view all the answers

What is the legal basis for One Person Corporation according to the text?

Republic Act No.11232: The revised corporation code of the Philippines Signup and view all the answers

What is the primary distinguishing feature of a nonprofit organization?

It raises funds to advocate and implement activities for public interest Signup and view all the answers

Which form of business organization requires DTI registration every five years?

Sole proprietorship Signup and view all the answers

What distinguishes a for-profit organization from a nonprofit organization in terms of ownership?

No one person owns or controls a for-profit organization Signup and view all the answers

What is the main goal of a for-profit organization?

To make a profit to sustain the business Signup and view all the answers

Which classification does a nonprofit organization often fall under?

Non-government organization (NGO) Signup and view all the answers

In a partnership, what is the liability of a general partner?

Unlimited liability for the debts & obligations of the business Signup and view all the answers

What is the legal requirement for contracts of partnership having a capital of 3,000 pesos or more?

Must appear in a public instrument Signup and view all the answers

What distinguishes a one person corporation from other types of corporations?

Separates owner's asset from the business asset Signup and view all the answers

Under what conditions is a contract of partnership void according to Article 1773?

If immovable property is contributed and no inventory is made, signed by parties, and attached to the public instrument Signup and view all the answers

What distinguishes stock corporations from non-stock corporations?

Profit status - profit or nonprofit Signup and view all the answers

Study Notes

Types of Organizations

The main goal of for-profit organizations is to earn profit.

Nonprofit vs. For-Profit Organizations

Nonprofit organizations are distinguished from for-profit organizations in terms of ownership: nonprofit organizations do not have owners, whereas for-profit organizations do.

Sole Proprietorship

The primary characteristic of a sole proprietorship is that it is owned and operated by a single individual.

Partnerships

The main difference between a general partner and a limited partner in a partnership is that a general partner has unlimited personal liability, while a limited partner has limited personal liability.
According to Article 1772, every contract of partnership having a capital of 3,000 pesos or more requires a public instrument.

Corporations

San Mig and PLDT are classified as stock corporations.
According to Republic Act No.11232, a single natural person can form a one person corporation.
A one person corporation is distinguished from other types of corporations in that it has a single stockholder.

Void Partnerships

A contract of partnership is void if it is contrary to law, morals, or public policy, or if it is with an impossible or unlawful object, according to Article 1773.

Nonprofit Organizations

The primary distinguishing feature of a nonprofit organization is that its purpose is not to earn profit, but to fulfill a social or charitable mission.
Nonprofit organizations often fall under the classification of foundations or charitable institutions.

Registration and Liability

Partnerships require DTI registration every five years.
In a partnership, a general partner has unlimited personal liability.

Legal Requirements

The legal requirement for contracts of partnership having a capital of 3,000 pesos or more is a public instrument, according to Article 1772.
The legal basis for One Person Corporation is Republic Act No.11232.

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Description

Explore the forms and characteristics of business organizations, the relationship between business and the economy, and the crucial roles that business entities play in modern society, such as driving economic growth, creating job opportunities, and supplying products and services to consumers.