BUSINESS ORGANIZATION

Reasons for engaging in business :

1) To make profit
2) To provide service
3) To become independent
4) To attain self
actualization
5) To stay active
CLASSIFICATION OF BUSINESS
Nature of Operations

Industry
Agriculture
Service
Commerce
BUSINESS SIZES
CLASSIFICATION TOTAL ASSETS NO. OF EMPLOYEES

Micro enterprise Up to P150,000 Up to 4

Cottage Up to P1.5M Up to 9

Small Up to P 15M Up to 99

Medium Up to P60M Up to 199

Large Above P60M 200 and above

MAJOR FORMS OF BUSINESS ORGANIZATION

1) Single or Sole 2) Partnership

proprietorship

Advantages :
1. Easy to organize
2. The proprietor is the boss
3. The owner all profits from his
business
Disadvantages :
1. Needs large amount of
financial resources
2. Benefits of specialization in
business management are not
present in small proprietorship
3. The owner has a limited
;iability
Advantages
1.Easy to organize
2. Better management because of
the presence of many
participants
3. Possibility of bigger resources
Disadvantages
1. Conflicts of quarrels between
or among partners
2. Lack of Stability
3. The partners are subject to
limited liability
Corporation
A contract where two or more
persons bind themselves to
contribute money, property or
industry to a common fund with
the intention of dividing the
profits among themselves
Advantages
1. Member has a limited liability
2. Has the most effective means
of raising money as capital for
its operation
Has permanent existence
Capable of getting the most
efficient management
Disadvantages
1. It is not easy to organize
2. Abuses of corporation
officials are likely to emerge
3. There is a very impersonal or
formal relationship between
officials and employees
CLASSIFICATIONS OF CORPORATIONS
1) Ownership Control
a. closed corporation
b. public corporation
c. government corporation
2) Nationality of stockholders
a. Domestic
b. Foreign
3) Corporate combinations
a. Joint venture
b. Merger
c. Holdings company