Colegio ng Lungsod ng Batangas
Information and Communication Technology
Course title: Entrepreneurship
Topic: Ownership and Organization
Reporter: Evora, Marianne R.
Perez, Ken Adams
Instructors: Mr. Gail B. Magalang
Ownership and Organization
This module provides the participants concept of each type or class of ownership and
organization an entrepreneur can choose in starting up a business. Advantages and disadvantages of each
types of ownership and organization are discussed. Although there is no best form of ownership in
general, there may be one form of ownership for each circumference based on the biases and preferences
of the entrepreneur.
The sole proprietorship or single proprietorship is a form of business organization initiated,
organized, owned or capitalized, and managed by single person.
Easily created and terminated
Direct, undiluted action
All rewards to owners
Minimum regulation and taxation
Perils of individuals
Limited skills and capabilities
A partnership is an association of two or more business partners who co-own a business for the
purpose of making a profit. In a partnership, the co-owners (partners) share the assets, liabilities, and
profit of the business according to the term of the partnership agreement.
Types of Partners
General partners-A general partner is one who shares ownership and management of the business.
Limited partners-they refer to partners with limited financial liability and they do not take active
role in the management
Silent partners-they refer to partners who do not take active participation in the business.
Dominant partner-they are neither active in the partnership nor they are generally known to be
associated with the business.
Capitalist partner-this is the type of partner who contributes money or property to the common
fund of the partnership.
Managing partner-this is the partner who is designated to manage the operations of the business
of the partnership.
Industrial partner-this is a partner who contributes his knowledge or personal services to the
Secret partner-this is a partner who takes active part in the business, but is not known to be a
Nominal partner or partner by estoppels-this is a partner who is actually not a partner, but is held
out or represented as a partners.
Liquidating partner-this is a partner who is designated to wind up or settle the affairs of the
partnership after dissolution.
Pooling of resources
Ability to obtain capital
Simplicity and incentive
Limited regulation and taxation
Independence on management harmony and coordination
Problems in share liquidation
A corporation is a n artificial being, invisible, intangible, and exists only in contemplation of law.
Its owners are the stockholder who can sell their interests in the corporation without affecting the
continuity of its operation because his life of the corporation is dependent or distinct from that of the
owner’s o stockholder.
Ready transferability of ownership
Legal formality and cost
Cost and time involved in the incorporation process
Potential loss of control by founder of the corporation
Republic act 6938, otherwise known as the cooperative code of the Philippines, defined a cooperative
as a duly registered association of persons, with a common bond of interest, who have voluntarily joined
together to achieve a lawful common social or economic end, making equitable contribution to the capital
required, and accepting a fair share of the risk and benefits of the undertaking in accordance with
universally accepted cooperative principles.
Principle of cooperative
Open and voluntary memberships- is open o all individuals, social and political,
radial or religious background beliefs.
Democratic control-affairs of the organization are administrated by personnel elected.
Limited interest on capital-shared capital receives strictly limited rate or interest.
Division on net surplus-net surplus arising out of the operation of cooperative belong
Cooperative education-all cooperatives are mandated to make provision for the
education of the member, officer, and employee
Cooperation among cooperatives-all cooperatives in order to best serve the interest of
their member and communities.
Advantages and Disadvantages of Cooperatives
Ability to provide direct benefits o its member and the entire community it serves in
the form of relatively cheaper products.
Inequality of profit distribution
The pro-masses or pro-bias of the cooperatives appears diametrically opposed to the
entrepreneurs’ idea of servicing a market.
General requirement and procedure for registration
Government agencies concerned for updated or revised administrative rule s and policies,
legislative enactment that may have to be complied with.
Registering a Single Proprietorship
Register the business name with the department of trade and Industry under the bureau of
2 pcs 2*2 picture
Application free or registration fee of P110.00
Registering a Partnership
Preparing partnership agreement
File the partnership agreement with the SEC
Evaluating of the application by the lawyer and staff of corporate and legal department
Release of approved registration is within 15-30 days
Registering a Corporation
Prepare articles of incorporation and by-law, bank certification
File articles if incorporation and by- laws with the SEC
File registration fee
Evaluating of application by lawyer and staff of corporate and legal department
Release of approved registration is within 15-30 days
Registering a cooperative
The following documents shall be forwarded to CDA;
Four (4) copies of the economic survey with a general statement describing briefly he
structure, purpose, economic feasibility, area of operation, size of memberships, and
other pertinent data.
Four (4) copies of article of incorporation together with he bond of accountable officers.
Four(4) copies by by-laws
Registration fee as prescribed by CDA
Dealing with local government units
The papers or documents issued by DTI, SEC, and CDA upon approval of the registration are
instrument which are national in character.
To be able to finally operate the business and open the doors to the public, the entrepreneurs have
to comply with all the permits and clearances imposed by legal government units. These are the
Cigar and liquor permit
Dealing with other government and private bodies
Agencies like DENR and DEPED may have to be consulted for their requirement to the
requirement to the registering organization. The entrepreneur’s own neighborhood may likewise oppose a
business proposition within the village or subdivision.
The Best Form of Ownership
The summary of the pros and cons of various form of business organization is shown below. It
would you give the entrepreneur the chance to evaluate his option;
PROPRIETORSHIP PARTNERSHIP CORPORATION
1.Simplicity in creation 1.Ease of establishment 1.limited liability of stockholder
2.low cost to establish 2.division of profits based on 2.ability to attract larger amount
partnership agreement of capital
3. owner receives all profits 3. larger pool of capital than 3.ability to have perpetual
4.owner retains all decision- 4.larger pool talent than 4.Ease of transfer of ownership
making authority proprietorship
5.no special legal restriction 5.ability to attract limited 5.larger pool of skills, talent, and
6.little government regulation 6.Potential for economiles of