We love

PROFITS!
Sole Proprietors make all of it.
PARTNERSHIPS
Share
PROFITS
Corporati
ons
Share profits among thousands
WHY a
CORPORATION ?
Business has grown
Want to expand
Want to be more visible
Want the latest equipment
Charge less than competitors
Gain market share
Dont
want
More Partners
But need MONEY
LOOK for WHAT?
FINANCIAL
BACKERS
Use their $$$ while you run the business
Thats what a
corporation is!
Owned by many
By law is treated as though it were a person
Can own property
Can pay taxes
Can sue & be sued
Can make contracts, etc.
A separate & distinct existence
From stockholders who own
its STOCK
= share of corporations ownership,
entitling buyer to part of future profits
& assets
Corporations
Corporation is an artificial being created by
operation of law having the right if succession
and the powers, attributes and properties
expressly authorized by law or incident to its
existence.



Corporation
A corporation is a form of business
organization in which the owners known as
stockholders have an undivided ownership
share in the assets of the corporation and
corresponding amount of shares of stock
which they own.

Organizing a Corporations
verification of corporate name with SEC

drafting and execution of the articles of
incorporation

deposit of cash receives for subscribed shares of
stock

filing the articles of incorporation

payment of filing and publication fees
issuance of SEC of the certificate of incorporation

Organizing a Corporation
registration of the corporate name with DTI
obtaining municipal licenses from the local
government
obtaining the VAT or non-VAT account number
from the BIR
registration with BIR of books of accounts and
accounting forms
Articles of Incorporation
name of the corporation
purpose for which the corporation being
incorporated
the place of the main office is to be located
the term of which the corporation is to exist
the names, nationalities and residences of the
incorporators

Articles of Incorporation
the number of directors or trustees
the names, nationalities and residences of directors
and trustees
if it is a stock corporation:
a. amount of authorized capital stock
b. the number of shares divided into par values
if it is a non-stock, the amount of capital, name,
nationalities and residencies of contributor and
contribution of each.

By-laws
it may be defined as the rules of a corporation
for the internal government of a corporation
and for the government of its officers,
stockholders and members.

By- laws
the time, place and manner of calling and
conducting regular or special meetings
the required quorum in meetings of
stockholders
the form of proxies of stockholders and
members
the qualification, duties and compensation of
directors

By-laws
-the time and holding of the annual election
of directors and trustees
-in case of stock corporation, the manner of
issuing stock certificates
-the penalties for violation of the by-laws

Right of Shareholders
right to attend and vote in person at
stockholders meeting
right to receive dividends when declared
right to inspect corporate books and records
right to pre-emption in the issue of shares
right to elect and remove directors
right to transfer of stock on the corporate
books

Corporations
Advantages
has a legal capacity
it has continued and
more or less
management is
centralized.
it has the most efficient
management

Corporations
Advantages
limited liability
shareholders freedom
ability to raise more
capital

Corporations
Disadvantages
not easy to organize

governmental
intervention
subject to higher tax

it has limited powers

Corporations
Disadvantages
abuses of corporate
officials
engaged in questionable
activities
formal relationship
between the officers and
employees of corporation



Classification of Corporation
1.based on nature of its capital
a.stock
b.non-stock

Classification of Corporation
2.based on purpose
a.public
b.private

Classification of Corporation
3. based on relation to other corporation
a.parent corporation
b.subsidiary corporation

Classification of Corporation
4.based on situs of incorporation
a.domestic corporation
b.foreign corporation
Classification of Corporation
5.based on whether they want it public or not
a.close corporation
b.open corporation

Categories of shares of stocks
1.common stock
2.preferred stock
3.class A shares
4.class B shares
5.par value shares
6.no par value shares
7.founders shares

Dividends
it is also called as the distributed profits of
the corporation. It represents the
corporations profit, which are distributed to
stockholders according to the proportionate
interest of their shareholdings

Kinds of dividends
1.cash
2.property
3.stock
4.scrip
5.bond
6.liquidating