Types of Business Organizations (Philippines) I. Single Proprietorship
Sole Proprietorship is a business structure owned by an individual who has full control/authority of its own and owns all the assets, personally owes answers all liabilities or suffers all losses but enjoys all the profits to the exclusion of others. A sole proprietorship must apply for a business name and be registered with the DTI-National Capital Region (NCR). In the provinces, application may be filed with the DTI regional/provincial offices. Government Agency in-charge Department of Trade and Industry of Sole Proprietorship businesses:
The single proprietor has unlimited liability in the sense that creditors of his business may proceed not only against the assets and property of his business but after his own personal assets and property. Creditors with whom he had incurred personal debts may also run after the assets and property of his single proprietorship business. Simply put, the law does not make any distinction between his personal affairs and his business transactions. Before the eyes of the law, they are one and the same, his business being a mere extension of his person. II. Partnership
Partnership is a form of business organization in which two or more persons agree to own and operate a business. The partners agree to combine their resources (money, materials, and management). They also share their profits and losses. However, there are ³silent´ partners. They only provide the financial capital but they do not participate in the management. There is also the ³industrial´ partner. He does not contribute money to the business organization but he is responsible for its management. III. Corporation
Corporations are entities established not merely for private gain but as effective as partners of the National Government in the social economic development of the nation. A corporation is an artificial being created by operation of law. It acquires juridical personality separate and distinct from the personalities of its directors; officers and stockholders, from the time its Articles of Incorporation is approved by the Securities and Exchange Commission and issued a Certificate of Incorporation.
The corporation can perform practically all business functions which a natural person can do ± it can own and dispose of properties, it can sue and be sued in its own name, it can enter into contracts. All its functions are performed through the directors and authorized officers, agents, and employees. Government Agency incharge of Corporations: Securities and Exchange Commission. IV. Cooperative
According to Republic Act 6938, a cooperative is 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 and making equitable contributions to the capital required and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles. Government Agency in-charge of Cooperatives: Cooperative Development Authority