Forms of

business organization
Group 1:
Entrepreneurship

Jerome Tañada
Khayla Marie Sanchez
 Forms of business organization
There are three most common forms of business
organization In a capitalist economy. There are
The sole Or single proprietorship, partnership
and corporation. However, there are other
forms of business organization, such as the
cooperative, joint venture and syndicate.
 Single proprietorship
This is a form of business organization that is
owned and usually managed by one person. It is
the oldest and simplest form of business
ownership. It is also the easiest to start. Most of
our business are in the form of single
proprietorship. They dominate the retailing,
agriculture and service industries
01 Advantages Of
Sole or single proprietorship
 Advantages of sole or single proprietorship
1. Ease and Low coat
formation and dissolution
It is Easy and cheap to start,
and it is also easy and cheap
to dissolve. It requires small
capital and there are no
legal papers needed.
Usually, only a license from
the department of trade
and idustry and a business
of permit from the city/munipal
goverment are required. On
the other hand, if such form of
business organization decides
to close it's operations, there
are no legal procedures to
comply with. The owner has of
course the obligation to pay
his creditors
 Advantages of sole or single proprietorship
• 2. Retention of profits. All
profits belong to the
owner of the business.
This is the greatest
incentive or rewad to the
entrepreneur. This is the
why many entrepreneurs
prefer the sole or single
proprietorship.
3. Independence and flexibility.
The owner is the boss. He makes
his own decisions and
implements then in accordance
with his will or wish. For
instance, the owner can change
his business hours, his product or
prices, He can also change his
style of management
 Advantages of sole or single proprietorship
• 4. Tax advantage and Likewise the government
less government has very minimal regulation
regulation. The owner and supervision over a
single proprietorship. The
does not pay several
owners deal with the
kinds of taxes. Usually, government when they pay
his earnings are taxed their business licenses,
as personal income permits and taxes.
tax.
 Disadvantage of
Sole or single proprietorship
1. Unlimited liability. This is the other side of profit, incase the
business fails, the owner assumes all the financial obigations. All
his personal properties, including savings, could be seized and
sold to pay creditors.
2. Lack of stability. If the owner dies, it is the end of the business.
However, members of the family or close frelatives can continue the
business. This happens only if such relatives are interested and the
business profitable
3. Limited access to credit. Banks and other financial institutions are
usually not willing to lend large amounts of money to single
proprietorships. Assets of owners are generally small to be used as
security or collateral. Such disadvantages prevents owners from
expanding their busisness operations.
 4. Limited business skills and knowledge. In many cases
the owner is the manager, salesman, bookkeeper,
messenger and janitor. There is no specialization
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PARTNERSHIP
PARTNERSHIP. It is an association of two or more persons
who act co-owners of the business. Each partner contributes
money, property or service to their organization.
Advantages of
Partnership
 Advantages of partnership
• 1 Easy To organize. Like 2 Availability of more
single proprietorship, a capital and credit.
partnership is relatively Partners can pool their
easy to form, much resources — properties,
easier than a equipment and others —
corporation. and can also use these for
security in obtaining bank
loans.
 Advantages of partnership
• 3 Retention of profits. Just like in the sole
proprietorship, the partners get all the profits of their
business. This stimulates the partners to improve their
operations.
4 Better business skills and knowledge. Each partner
contributes his skills and knowledge to the organization.
Disadvantages of
Partnership
 Disadvantages of partnership

• 1 Unlimited liability. 2. Lack of stability. A

Each general partner is partnership is terminated
personally responsible in case of the death,
withdrawal or legally
for all the debts of the
insanity of any one of the
business. general partners
 Disadvantages of partnership
• 3. Management 4. Idle investment. It is
disagreement. It is true quite easy to invest
that two or more heads money in partnership.
are better than one. But But sometimes it is
if they do not work in difficult to get it out.
unity, conflicts arise.
 Corporation
• it is an artificial being created by operation of law,
having the right of succession, and the powers,
attributes and properties expressedly authorized by
law or incident to its existence.
• The share or certificates of ownership of a
corporation are called stocks. The owners of stocks
are called stockholders or shareholders.
Advantages of
A Corporation
 Advantages of a corporation
• 1. Limited liability. The liability of a stockholder is only
up to his shares of stock.
• 2. Easy to raise capital. Asia from bank loans, a
corporation can sell shares of stock to the public for
additional funds.
• 3. Perpetual life. The life of a corporation does not end
with the withdrawal or death of ker owners.
• 4. Specialized management. A corporation can hire
profetional managers and specialist.
Disadvantages of
A corporation
 Disadvantages of a corporation
• 1. Difficult to organize. It is difficult and quite expensive to
organize a corporation.
• 2. Strictly regulated and supervised by the government.
Government regulation and supervision on corporations are
closest compared with the other forms of business organization.
• 3. Some corporations are socially irresponsible. They sell
worthless securities (stocks and bonds), they pollute the
environment, and sell substandard goods.
• 4. Formal and impersonal employer-employee relationship. A
corporation has several layers of management.
THANKS
FOR YOUR ATTENTION