Understanding Business Forms PDF

Understanding Business Forms Business Ethics and Social Responsibilities Kristel An Pineda, LPT preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO...

Understanding Business Forms Business Ethics and Social Responsibilities Kristel An Pineda, LPT preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC.  What is Business? Definition What do you need to establish a business? A business is an organization or economic system It involves investment, operational activities, and consistent exchanging goods and services for money or other goods customer engagement to generate profit. and services. Brainstorm as a team: Product, ingredients/materials, equipment, breakdown of capital, marketing strategy, ideal description of location where to establish the business, target customers. preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC. Basic Forms of Business Organizations Businesses can take various forms, such as: Sole Proprietorship – Owned by one person. Partnership – Owned by two or more people. Corporation – A separate legal entity owned by shareholders. Cooperative – Owned and operated by a group for mutual benefit. preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC. Sole Proprietorship Definition A sole proprietorship is a business owned and operated by one person. The owner has unlimited liability for all business obligations. Example A freelance writer operating under their name, a small bakery run by a single individual, or a home-based craft business. preencoded.png Sole Proprietorship Assets of sole trader Advantages Disadvantages Computer infrastructure Easy and inexpensive to set up. Unlimited liability Inventory Full control over decision-making. Limited capital Manufacturing equipment Owner keeps all profits. Heavy workload and responsibilities Retail fixtures Minimal regulatory requirements. on the owner. Real property owned by the business Flexible operations. Lack of continuity preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC. Partnership Definition Example A partnership is a business A law firm with two partners, a owned by two or more restaurant owned by two individuals who share profits friends, or a consulting firm and liabilities. with multiple partners. preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC.  Partnership Assets Advantages Disadvantages Office buildings Ease of Formation Unlimited Liability Equipment Shared Responsibility Potential Conflicts Inventory Combined Resources & Expertise Shared Profits Supplies Flexibility Limited Continuity Vehicles and machinery Profit Sharing Difficulty in Decision-Making Skills, and reputation of the Enhanced Decision-Making Dependence on Partner partners. Performance preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC. Corporation Limited Liability Public or Private Owners have limited liability, Corporations can be publicly or meaning they are not personally privately owned. Can be either for responsible for business debts. profit and non-profit. Separate Legal Entity Example A corporation is a separate legal Jollibee Foods Corporation (JFC)A entity from its owners, with its leading fast-food chain operator. own rights and responsibilities. preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC. Corporation Assets Advantages Buildings Limited Liability Equipment Separate legal entity Inventory Continuity Brand value patents Access to capital Professional management Disadvantages Complex and Costly: Expensive to establish and maintain Regulatory Compliance Double Taxation Potential Conflicts preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC. Cooperative 1 Member-Owned 2 Mutual Benefit 3 Democratic Governance A cooperative is a member-owned business that focuses on meeting common needs, such as lowering costs and providing mutual support. Unlike traditional businesses, cooperatives prioritize member benefits over profit and operate on the principle of democratic control, where each member has one vote. preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC. Cooperative Examples 1 Assets 2 Advantages Property, Equipment, Member Benefits inventory, and land. Democratic Control Member relationships, Lower Costs community trust, and Mutual Support brand value. Non-Profit 3 Disadvantages Limited Funding: Reliant on member contributions Slow Decision-Making: Consensus-based decision-making can lead to delays. Profit Distribution Active Participation Required preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC. Cooperative Registration and Regulation In many countries, including the Philippines, cooperatives must be registered with a government body (e.g., Cooperative Development Authority (CDA) in the Philippines). This ensures legal recognition and access to benefits like tax exemptions and government support programs. preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC. Choosing the Right Business Structure Liability Consider the level of personal liability you're willing to accept. Taxation Each structure has different tax implications, impacting your financial obligations. Funding Some structures may make it easier to raise capital for your business. Control Determine the level of control you want over your business decisions. preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC. Key Takeaways Understanding the different business forms is important for making informed decisions about your business. Each form offers unique advantages and disadvantages, impacting liability, taxation, funding, and control. Carefully consider your specific needs and goals when choosing the right form for your business. preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC. Activity: By Group Instruction: 1. Think of 1 business. 2. Product, ingredients/materials, equipment, breakdown of capital, marketing strategy, ideal description of location where to establish the business, target customers. 3. Decide what business form it will be. 4. Assets (5, in general) 5. List down the advantages of this business form when used in an example of a business you decided on. 6. List down the disadvantages of this business form when used in an example of a business you decided. 7. To be presented next meeting with visual. preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC. Identify the type of business to which the following belongs: 1. Active Participation Required 15. Lower Costs 2. Combined Resources & Expertise 16. Member Benefits 3. Complex and Costly 17. Mutual Support 4. Conflict in decision making 18. Non-Profit 5. Democratic Control 19. Owner keeps all profits 6. Dependence on Partner Performance 20. Potential Conflicts 7. Double Taxation 21. Professional management 8. Easy access to capital 22. Profit Sharing 9. Easy to establish 23. Regulatory Compliance 10. Enhanced Decision-Making 24. Separate legal entity 11. Full control over decision-making. 25. Shared Profits 12. Heavy workload and responsibilities on the owner. 26. Shared Responsibility 13. Lack of continuity 27. Slow Decision-Making 14. Limited capital 28. Unlimited liabilities preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC.  End preencoded.png SYSTEMS PLUS COMPUTER COLLEGE FOUNDATION SAN FERNANDO INC.