Forms of Business Organizations

Forms of Business Organizations

1. Sole proprietorship

                A business organized by one person. Usually, this kind of business organization is a small service-type businesses and retail establishments. Which the owner receives all profits, absorbs all losses and is solely responsible for all debts of the business. The sole proprietorship (owner) is distinct from its proprietor (business). Accounting records of the sole proprietorship do not include the proprietor's personal financial records.

It has to be registered to the following government agencies:

- Department of Trade and Industry (DTI)

- Local Government where business is located ( Barangay & Mayor's Office)

- Bureau of Internal Revenue

- If you have employees { Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), Home Mutual Development Fund ( PAG-IBIG)}

2. Partnership

                A business owned by two or more individuals who contribute money, property and talent. These individuals are called partners. They share in the management of the business and naturally share the profits among themselves. The partnership (business) as a separate organization, distinct from the personal affairs of each partner.

It has to be registered to the following government agencies:

     - Articles of Co-Partnership approved by the Securities and Exchange Commission (SEC)

     - Local Government where business is located ( Barangay & Mayor's Office)

     - Bureau of Internal Revenue

     - Social Security System (SSS)

     - Philippine Health Insurance Corporation (PhilHealth)

     - Home Mutual Development Fund ( PAG-IBIG)

3. Corporation

                It is an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence. A business owned by its stockholders. The shareholder or stockholder whose have a right over the business is expressed in the number of shares bought and is evidenced by a certificate of stock. A corporation cannot be managed by all the shareholders. Because it is managed by a Board of Directors elected by the shareholders from among themselves; considering the number of shareholders allowed to invest, a huge amount of capital can therefore be obtained. The corporation is a separate legal entity which mean it is separate from personal affairs of shareholders.

-  It has to be registered to the following government agencies:

     - Articles of Incorporation approved by the Securities and Exchange Commission (SEC)

     - Local Government where business is located ( Barangay & Mayor's Office)

     - Bureau of Internal Revenue

     - Social Security System (SSS)

     - Philippine Health Insurance Corporation (PhilHealth)

     - Home Mutual Development Fund ( PAG-IBIG)