Types of Business Organization and Activities

Flashcards covering the types of business organizations (Sole Proprietorship, Partnership, Corporation, Cooperative), their advantages and disadvantages, legal registration requirements, and types of business activities.

Sole Proprietorship

A business organization consisting of one individual doing business, which is the most common form of business organization.

Partnership

A business organization consisting of two or more individuals in business together; types include general, limited, and limited liability partnerships.

Corporation

A business whose capital is divided into shares of stock and is created by operation of law, serving as a legal entity distinct from the individuals within it.

Stockholders

The owners of a corporation; the formation requires at least 5 and at most 15 incorporators.

Cooperative

A duly registered association of persons with a common bond of interest who voluntarily join to achieve a lawful common social or economic end under Republic Act 6938.

Unlimited liability

A disadvantage of sole proprietorships and partnerships where owners are personally responsible for the obligations of the business.

Synergy

An advantage of partnerships involving the potential for enhancement of value resulting from two or more individuals combining strengths.

Double taxation

A disadvantage for corporations where the entity pays corporate income tax and shareholders pay personal income taxes on dividends.

Department of Trade and Industry (DTI)

The government agency responsible for registering a sole proprietorship through its Bureau of Trade Regulation and Consumer Protection.

Securities and Exchange Commission (SEC)

The agency where partnerships and corporations are registered upon the submission of various articles and certificates.

Cooperative Development Authority (CDA)

The body where cooperatives are registered upon submission of an Economic Survey and other notarized documents.

Articles of Incorporation

One of the primary documents required to be filed with the SEC for the registration of a corporation.

Treasurer’s Affidavit

A required document for corporation registration that states compliance with authorized subscribed and paid-up capital stock requirements.

Corporate Life

The term of existence for a corporation, which should not exceed $50$ years according to registration requirements.

Service Business

A type of business that provides intangible products with no physical form, such as professional skills, expertise, or advice.

Merchandising Business

A 'buy and sell' business that buys products at wholesale price and sells them at retail price without changing their form.

Manufacturing Business

A business that buys products with the intention of using them as materials to create new products through the transformation of raw materials.

Articles of Partnership

A document filed with the Securities and Exchange Commission (SEC) to legally register a partnership.

Economic Survey

A required document for the formation of a cooperative to be submitted to the Cooperative Development Authority (CDA).

Intangible products

Products with no physical form provided by service businesses, such as expertise and professional advice.