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    The Nature and Forms of Business Organizations

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    Allan Angeles Orbita
    This document discusses different forms of business organizations. It explains that a business is an organization that produces and sells goods and services for profit. The main forms of business organization discussed are sole proprietorship, partnership, corporation, and limited liability company (LLC). Each form has different advantages and disadvantages related to taxes, liability, costs, and ownership. Sole proprietorships are the simplest but provide no liability protection, while corporations provide more liability protection but are more complex and costly to form. The document provides examples of different businesses that might choose each organizational form.

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    © All Rights Reserved
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    The Nature and Forms of Business Organizations

    Uploaded by

    Allan Angeles Orbita
    2K views18 pages
    This document discusses different forms of business organizations. It explains that a business is an organization that produces and sells goods and services for profit. The main forms of business organization discussed are sole proprietorship, partnership, corporation, and limited liability company (LLC). Each form has different advantages and disadvantages related to taxes, liability, costs, and ownership. Sole proprietorships are the simplest but provide no liability protection, while corporations provide more liability protection but are more complex and costly to form. The document provides examples of different businesses that might choose each organizational form.

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    The nature and forms of business organizations

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    © © All Rights Reserved

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    This document discusses different forms of business organizations. It explains that a business is an organization that produces and sells goods and services for profit. The main forms of business organization discussed are sole proprietorship, partnership, corporation, and limited liability company (LLC). Each form has different advantages and disadvantages related to taxes, liability, costs, and ownership. Sole proprietorships are the simplest but provide no liability protection, while corporations provide more liability protection but are more complex and costly to form. The document provides examples of different businesses that might choose each organizational form.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    2K views18 pages

    The Nature and Forms of Business Organizations

    Uploaded by

    Allan Angeles Orbita
    This document discusses different forms of business organizations. It explains that a business is an organization that produces and sells goods and services for profit. The main forms of business organization discussed are sole proprietorship, partnership, corporation, and limited liability company (LLC). Each form has different advantages and disadvantages related to taxes, liability, costs, and ownership. Sole proprietorships are the simplest but provide no liability protection, while corporations provide more liability protection but are more complex and costly to form. The document provides examples of different businesses that might choose each organizational form.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 18

    THE NATURE AND

    FORMS OF BUSINESS
    ORGANIZATIONS
    B U S I N E SS
    • Is an organization or an enterprise
    which is concerned with engaging in
    commercial, industrial and professional
    activities.
    • Refers to the organized efforts and
    activities of individuals to produce and sell
    goods and services for profit.
    • it is an occupation, profession or trade.
    It can also be a commercial activity wherein
    goods and services are provided in
    exchange for profit
    • Is an economic activity, wherein in it is
    involved in a continuous and regular
    production and distribution of goods
    and services for satisfying human
    wants.
    YOUR COMPANY’S
    FORM WILL AFFECT:

    • How you are taxed


    • Your legal liability
    • Costs of formation
    • Operational costs

    3
    What are
    the different
    forms of
    business
    organization
    s?
    4
    SOLE
    PROPRIETORSHI
    P
    • Simplest and most
    common form of business
    ownership

    • Run and owned by someone


    for own benefit

    • Entirely dependent on
    owners decisions

    5
    SOLE PROPRIETORSHIP

    ADVANTAGES DISADVANTAGES
    • All profits are subject to the • Owner is 100% liable for
    owner business debts
    • There is very little regulation • Equity is limited to the owner’s
    for proprietorships personal resources
    • Owners have total flexibility • Ownership of proprietorship is
    when running the business difficult to transfer
    • Very few requirements for • No distinction between
    starting—often only a business personal and business income
    license

    6
    PA R T N E R S H I P
    • Comes in two types: General and
    Limited
    • General: Both parties invest their
    money, property, labor etc. ; Both
    are liable for the debts of the
    business; Do not require a formal
    agreement
    • Limited: Require a formal
    agreement; filing of certificate of
    partnership required; liability is
    limited according to their portion
    of ownership or investment.
    • 2-3 individuals

    7
    PA R T N E R S H I P

    ADVANTAGES DISADVANTAGES
    • Shared resources provides • Each partner is 100%
    more capital for the business responsible for debts and
    losses
    • Each partner shares the total
    profits of the company • Selling the business is difficult
    —requires finding new partner
    • Similar flexibility and simple
    design of a proprietorship • Partnership ends when any
    partner decides to end it
    • Inexpensive to establish a
    business partnership, formal
    or informal

    8
    C O R P O R AT I O N
    • For tax purposes
    • Separate entities
    • A Legal person
    • Profits generated by the
    corporation are taxed as
    personal income
    • Income distributed to
    shareholders as dividends are
    taxed again by the owners as
    personal income

    9
    C O R P O R AT I O N

    ADVANTAGES DISADVANTAGES
    • Limits liability of the owner to • Corporate operations are
    debts or losses costly
    • Profits and losses belong to • Establishing a corporation is
    the corporation costly
    • Can be transferred to new • Start a corporate business
    owners fairly easily requires complex paperwork
    • Personal assets cannot be • With some exceptions,
    seized to pay for business corporate income is taxed
    debts twice

    10
    LIMITED
    LIABILITY
    C O M PA N Y ( L L C )
    • Similar to the Limited
    Partnership
    • provides owners with limited
    liability while providing
    some of the income
    advantages of a
    partnership
    • advantages of
    partnerships and
    corporations are combined
    in an LLC

    11
    L I M I T E D L I A B I L I T Y C O M PA N Y ( L L C )

    ADVANTAGES DISADVANTAGES
    • Limits liability to the company • Ownership is limited by certain
    owners for debts or losses state laws
    • The profits of the LLC are • Agreements must be
    shared by the owners without comprehensive and complex
    double-taxation
    • Beginning an LLC has high
    costs due to legal and filing
    fees

    12
    SOLE PROPRIETORSHIP

    SARI-SARI STORE COMPUTER REPAIR SHOP

    13
    PA R T N E R S H I P

    BEN & JERRY’S ICE CREAM


    WARNER BROS. COMPANY COMPANY

    14
    C O R P O R AT I O N

    AYALA CORPORATION SAN MIGUEL CORPORATION

    15
    L I M I T E D L I A B I L I T Y C O M PA N Y ( L L C )

    MODERN CONSTRUCTIONS & TRADING


    AFRICAN & EASTERN LLC Co. LLC

    16
    REASONS WHY
    BUSINESSES ARE PUT
    UP
    • FOR PROFIT
    • TO GIVE SOLUTION TO THE
    PROBLEMS OF CONSUMERS
    • TO HELP GIVE JOB OPPORTUNITIES

    • TO HELP BUILD THE ECONOMIC


    STATUS OF A COUNTRY
    • TO HELP SUPPORT GLOBALIZATION
    • TO HELP THE CIRCULATION OF
    MONEY

    1
    7
    SUMMAR
    Y

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