types of business sole proprietorship parntership corporation types of partnership
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OWNERSHIPAND
STRUCTURALFORMS OF BUSINESS
ENTERPRISE
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OWNERSHIP It means the legal title to a thingor control over the thing owned,
the right possession and disposal. Title to and possession of theassets of the enterprise , the
power to determine the policiesof the operation and the right toreceive and dispose of the
proceeds.
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TYPES OF BUSINESS
OWNERSHIP Private Ownership
When an enterprise
is so organized thatprivate individualsexercise and enjoythe rights and
privileges of anowner in their owninterest.
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TYPES OF BUSINESS
OWNERSHIP Public Ownership
Controlled bypolitical bodies as amunicipal , provincialor nationalgovernment or byany instrumentalitycreated by them
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TYPES OF BUSINESS
OWNERSHIP Mixed Ownership
It exists when the
elements ofownership aredivided such thatprivate persons and
public bodies sharein the operation ofthe same enterprise
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FORMS OF PRIVATEOWNERSHIP
1. Individual or single or sole
proprietorship2. Partnership
3. Cooperative Organization
4. Corporation
5. Corporate combination
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FACTORS INVOLVEDIN BUSINESS FORMS
The nature and size ofthe business
The capital requiredand the means ofprocuring it
The length of time theenterprise is expectedto operate
The technical conditions
affecting the enterprise
The types of productsto be manufactured
The method andvolume of production
The kind of markets to
be supplied andmethods of marketing
The competitivenature of the chosen
industry.
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1. SINGLE
PROPRIETORSHIP The ownership is vested in oneperson.
This form of ownership is small,requires but little amount of
capital and is readily establishedunder the control of one man.
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ADVANTAGES OF
SINGLE PROPRIETORSHIP It is easy to start and to terminate
Control and management lies
entirely in the hands of the ownerOnly a small amount of capital isrequired in starting
Profits belong entirely to theowner
High Credit Standing
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DISADVANTAGES OF
SINGLE PROPRIETORSHIPLimited judgment and
wisdom.Limited amount of capital
Unlimited liability
Difficulties of Management
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2. PARTNERSHIPThe business partnership is a
business relationship betweentwo or more persons competentto make contracts for the
purpose of engaging in abusiness activity.
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ADVANTAGES OF
PARTNERSHIP It could be as easily formed as the single
proprietorship.
There are more persons to conduct thebusiness and to handle its problems.
A partnership has access to greater or
better credit facilities The combined ability and resources of
partners are a source of strength.
Retention of Valuable Employees
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DISADVANTAGES OF
PARTNERSHIPUnlimited liability of partners
Disagreement betweenpartners often lead to delayand difficulties which could
endanger the enterprise.Easy dissolution
Frozen Investment
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LIMITED PARTNERSHIPOne or more of the partners ina limited partnership must begeneral partners, who haveunlimited liability. The limited or
special partners have onlylimited liability, which is up tothe extent of their investment.
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ADVANTAGES OF
LIMITED PARTNERSHIPThere is a single direction ofmanagement , thus there isunity and prompt action
The limited liability of
special or limited partners ,serves as good inducement
of investments.
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DISADVANTAGES OF
LIMITED PARTNERSHIPThe unlimited power
given to general partnersmay result in abuse.
Possibility of collusionamong partners to
defraud the creditors
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KINDS OF PARTNERS1. General Partner2. Limited Partner
3. Capitalist partner4. Industrial Partner
5. Managing Partner
6. Liquidating Partner
9. Ostensible Partner
10. Secret Partner
11. Silent Partner12. Dormant Partner
13. Nominal Partner
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3. COOPERATIVE
ORGANIZATIONA cooperative association
has some elements of alarge partnership and alsomany features of a
corporation , although it isdistinct from both .
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KINDS OF
COOPERATIVEThe Consumers Cooperative
It draws its members from thegeneral public. Thiscooperative carries on retail
trade operations.
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4. CORPORATIONA corporation is an artificial
being created by operation oflaw having the right ofsuccession and the powers,
attributes, and properties,expressly authorized by law or
incident to its existence.
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NATURE ANDCHARACTERISTICS OF A
CORPORATION:1. It is an artificial business unit, and its
creation is through the process of law.
2. The basic structure of a corporation issimple.
3. The corporation is of wide scope.
4. The existence of a corporation ispractically permanent by operation oflaw.
5. The function of a corporation is public.
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