Quiz Sa Monday

Question 1

refers to a business structure where a single individual owns and operates the business. In here, there is no legal distinction between the owner and the business entity itself. This means that the owner is personally responsible for all aspects of the business, including its debts, liabilities, and legal
obligations.

Answer 1

Sole Proprietorship

Question 2

What are the advantages of sole proprietorship?

Answer 2

• Simple and Inexpensive Setup
• Direct Control
• Flexibility
• Tax Benefits
• Direct Rewards

Question 3

What are the disadvantages of sole proprietorship?

Answer 3

• Unlimited Liability
• Limited Resources
• Limited Skills and expertise
• Business Continuity
• Difficult in Scaling

Question 4

A type of business structure where two or more individuals or entities come together to jointly own and operate a business for profit. These are governed by agreements outlining the terms of the partnership, including profitsharing, decision-making authority, and responsibilities of each partner

Answer 4

Partnership

Question 5

What is under the Civil code of the Philippines. Article 1767

Answer 5

By the contract of partnership, 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

Question 6

In here, all partners share equally in the profits, losses, and management responsibilities of the business. Each partner has unlimited personal liability for the debts and obligations of the partnership.

Answer 6

General Partnership (GP)

Question 7

there are two types of partners: general partners and limited partners. General partners have unlimited liability and manage the business, while limited partners contribute capital but have limited liability and no involvement in management.

Answer 7

Limited Partnership (LP)

Question 8

What are advantages of Partnership?

Answer 8

• Shared Responsibility and Resources
• Combined Skills and Expertise
• Access to Capital
• Tax Benefits
• Flexibility

Question 9

What are the disadvantages of Partnership?

Answer 9

• Unlimited Liability
• Potential for Conflict
• Shared Profits
• Dependency on Partners
• Difficult in Existing

Question 10

a legal entity created by an individual or group of shareholders who have ownership of the corporation to engage in business activities.

Answer 10

Corporation

Question 11

defined as an artificial being created by operation of law. It possesses a juridical personality, which is separate and distinct from that of each shareholder, partner, or member. This legal entity has the right of succession and enjoys powers, attributes, and properties expressly authorized by law or incidental to its existence.

Answer 11

Meaning of Corporation in the civil code of the Philippines

Question 12

What are the advantages of Corporations

Answer 12

• Limited Liability
• Perpetual Existence
• Access to Capital
• Transferability of Ownership
• Tax Benefits

Question 13

What are the disadvantages of Corporations

Answer 13

• Complexity and Regulation
• Double Taxation
• Costs of Formation and Maintenance
• Agency Issues
• Disclosure and Transparency

Question 14

often referred to as a co-op, is a business or organization owned and operated by its members for their mutual benefit. These are based on the principles of democratic control, voluntary participation, and equitable distribution of benefits.

Answer 14

Cooperative

Question 15

a business organization owned by a group of individuals and is operated for their mutual benefit. The persons making up the group are called

Answer 15

Members

Question 16

What are the advantages of Cooperatives?

Answer 16

• Democratic Control
• Mutual Benefit Cooperatives
• Shared Costs and Resources
• Risk Mitigation
• Social and Community Impact
• Education and Training

Question 17

What are the disadvantages of Cooperatives?

Answer 17

• Decision-making challenges
• Limited Access to Capital
• Potential for Free Riding
• Business Complexity
• Limited Scale and Growth

Question 18

Cooperatives in the Philippines are regulated by this, and are guided by the principles of cooperative governance, democratic control, and member participation.

Answer 18

Cooperative Development Authority (CDA)

Question 19

What are the 7 cooperative principles?

Answer 19

1. Voluntary and Open Membership
2. Democratic Member Control
3. Member Economic Participation
4. Autonomy and Independence
5. Education, Training and Information
6. Cooperation among cooperatives
7. Concern for Community

Question 20

Cooperatives are open to all individuals who share a common need or interest and are willing to contribute to and participate in
the cooperative’s activities. Membership is voluntary and not based on arbitrary or
discriminatory criteria such as race, religion, gender, or social status.

Answer 20

Voluntary and Open Membership

Question 21

Cooperatives are democratic organizations controlled by their members, who actively participate in decision-making processes and have equal voting rights. Decisions are made on a one-member, one-vote basis, regardless of the member’s level of investment or ownership stake.

Answer 21

Democratic Member Control

Question 22

Members of cooperatives contribute equitably to the capital of the cooperative and share in the economic benefits and risks proportionally to their participation. This may include purchasing shares, contributing capital, or patronizing the cooperative’s products or services.

Answer 22

Member Economic Participation

Question 23

Cooperatives are autonomous, self-help organizations controlled by their members. They operate independently of external influences, such as government or private investors, and have the freedom to pursue their goals and interests in accordance with cooperative principles.

Answer 23

Autonomy and Independence

Question 24

Cooperatives provide this to their members,
employees, and the community to promote
understanding of cooperative principles and practices, develop members’ skills and
knowledge, and enhance the effectiveness and sustainability of the cooperative.

Answer 24

Education, Training, and Information

Question 25

Cooperatives work together through mutual cooperation and collaboration to promote the cooperative movement, strengthen
their collective bargaining power, and achieve common goals and interests. This
principle reflects the spirit of solidarity and mutual support among cooperatives

Answer 25

Cooperation among cooperatives

Question 26

Cooperatives are committed to serving the best interests of their communities and contributing to their social and economic development. They operate in a socially responsible manner, considering the impact of their decisions and actions on the well-being of their members and the broader community

Answer 26

Concern for Community

Question 27

1. Starting a Home-Based Business:
   Situational Question: Imagine you are a recent college graduate with a passion for
   baking. You are considering starting a home-based bakery business as a sole
   proprietor. Discuss the advantages and disadvantages of operating as a sole
   proprietorship in this scenario. Consider factors such as ease of formation, liability
   exposure, taxation, flexibility, and potential challenges

Answer 27

Advantages:
1. Low Overhead Costs: Operating from home eliminates the need for leasing commercial space, reducing overhead costs such as rent and utilities.
2. Flexibility: You have the freedom to set your own working hours, allowing for better work-life balance and the ability to cater to customer demands at convenient times.
3. Direct Customer Interaction: Operating from home enables more personalized customer interactions, fostering stronger relationships and customer loyalty.
4. Creative Control: As the sole proprietor, you have full control over product offerings, allowing you to experiment with recipes and cater to niche markets.
5. Community Engagement: A home-based bakery can become a focal point in the local community, attracting customers through word-of-mouth and creating a sense of belonging.

Disadvantages:
1. Limited Capacity: Working from home may limit production capacity compared to commercial bakeries, potentially restricting the volume of orders you can fulfill.
2. Zoning Regulations: Home-based businesses are subject to zoning regulations and may require permits or licenses, which could pose challenges depending on local regulations.
3. Distractions: Working from home can be susceptible to distractions, such as household chores or family interruptions, which may impact productivity.
4. Perception: Some customers may perceive home-based bakeries as less professional or hygienic compared to commercial establishments, affecting their willingness to purchase.
5. Expansion Challenges: Scaling a home-based bakery business may be challenging due to space limitations and regulatory constraints, limiting opportunities for growth.

.

Question 28

2. Partnerships:
   Situational Question: Two friends are considering starting a restaurant together.
   Compare and contrast the advantages and disadvantages of forming a general
   partnership versus a limited partnership for their business. Discuss factors such as
   shared control, personal liability, profit-sharing arrangements, andbmanagement
   flexibility. Consider potential scenarios and how each partnership structure would
   handle them.

Answer 28

Advantages:

• Shared Control: General partnerships offer shared control and decision-making among partners, allowing for collaborative management, while limited partnerships provide limited liability protection for passive investors, enabling them to contribute capital without assuming management roles.

• Personal Liability: General partnerships expose all partners to unlimited personal liability for debts and obligations, risking personal assets, whereas limited partnerships may lead to conflicts between general and limited partners over decision-making and management roles, potentially impacting business operations.

• Profit Sharing Arrangements: In general partnerships, profit-sharing arrangements are typically equal among partners, fostering a sense of equality, whereas in limited partnerships, profits can be distributed based on the agreement between general and limited partners, allowing for flexibility in profit-sharing arrangements.

• Management Flexibility: Both partnership structures offer management flexibility, with general partnerships allowing all partners to participate actively in management decisions, while limited partnerships allow for a separation of management and investment roles, enabling passive investors to contribute capital without involvement in day-to-day operations.

Disadvantages:

• Shared Control: General partnerships may encounter conflicts over decision-making and management responsibilities, potentially impacting the stability of the partnership, while limited partnerships may face conflicts between general and limited partners over management and decision-making roles, affecting business operations.

• Personal Liability: General partnerships expose all partners to unlimited personal liability for debts and obligations, risking personal assets, while in limited partnerships, only general partners retain unlimited liability, potentially exposing their personal assets to risks beyond their investment.

• Profit Sharing Arrangements: Conflicts may arise in general partnerships over profit distribution, impacting the partnership’s cohesion, whereas limited partnerships may experience disagreements over decision-making and management responsibilities, affecting the partnership’s effectiveness.

• Management Flexibility: While both partnership structures offer flexibility, general partnerships may face challenges in decision-making due to equal participation among partners, potentially leading to conflicts, while limited partnerships may encounter difficulties in balancing the roles of general and limited partners, impacting business operations and efficiency.

Question 29

3. Startup Funding:
   Situational Question: A group of entrepreneurs has developed a groundbreaking technology startup and is seeking funding to scale their operations. Compare and contrast the advantages and disadvantages of structuring the startup as a corporation versus other legal forms of business organization. Consider factors such as access to capital, liability protection, taxation, governance structure, and long-term growth prospects.

Answer 29

Advantages:

• Access to Capital: Corporations have access to various funding options, including issuing stocks and bonds, attracting venture capital investment, and securing bank loans, facilitating rapid growth. In contrast, partnerships and LLCs may face challenges in accessing external funding compared to corporations.

• Liability Protection: Shareholders of corporations enjoy limited liability protection, shielding their personal assets from business debts and liabilities. However, partners or members in partnerships and LLCs may have unlimited personal liability for business debts and obligations, exposing their personal assets to risks.

• Taxation: Corporations are subject to corporate tax rates, with potential for double taxation of profits distributed as dividends. On the other hand, partnerships and LLCs are generally taxed as pass-through entities, meaning profits and losses are passed through to the individual partners or members and taxed at their individual tax rates, avoiding double taxation.

• Governance Structure: Corporations have a well-defined governance structure with a board of directors and officers, providing clear roles and responsibilities for decision-making and management. In contrast, partnerships and LLCs offer greater flexibility in management and decision-making, allowing for customized structures tailored to the needs of the founders.

• Long-Term Growth Prospects: Corporations offer scalability and continuity, allowing for long-term growth and sustainability beyond the lifespan of individual shareholders. However, partnerships and LLCs may face challenges in achieving long-term growth due to limitations in access to capital and potential conflicts among partners.

Disadvantages:

• Complexity and Regulation: Corporations are subject to extensive regulatory requirements and compliance obligations, including periodic reporting, shareholder meetings, and corporate governance standards, which can be time-consuming and costly. In contrast, partnerships and LLCs have simpler formation processes with fewer regulatory requirements and compliance obligations.

• Double Taxation: Profits earned by corporations are taxed at the corporate level, and dividends distributed to shareholders are taxed again at the individual level, leading to potential double taxation of income. Partnerships and LLCs avoid double taxation as profits and losses are passed through to the individual partners or members.

• Loss of Control: Founders and early shareholders in corporations may experience a loss of control over the company as additional shareholders are brought on board, potentially diluting their ownership stake and influence. Partnerships and LLCs offer greater control and flexibility in decision-making but may face challenges in managing conflicts among partners.

• Cost of Formation: Establishing and maintaining a corporation typically involves higher upfront costs and ongoing expenses, such as legal fees, registration fees, and administrative costs. In contrast, partnerships and LLCs have lower startup costs and ongoing expenses, making them more accessible to small businesses and startups with limited resources.

Question 30

4. Situational Question: A group of farmers in a rural community wants to establish
   a cooperative to collectively market their agricultural products. Describe the significance of the cooperative principles in guiding the formation and operation of
   this cooperative. Discuss how the cooperative principles promote democratic
   control, mutual benefit, and community development. Provide examples of how
   these principles could be applied in the context of the farmers’ cooperative.

Answer 30

1. Voluntary and Open Membership: The cooperative invites all local farmers to join, promoting inclusivity and collective action.
2. Democratic Control: All members have equal decision-making power, ensuring fairness and representation.
3. Member Economic Participation: Members invest and share profits based on participation, fostering ownership and mutual benefit.
4. Autonomy and Independence: The cooperative operates independently, prioritizing members’ interests over external influences.
5. Education, Training, and Information: Members access educational resources, empowering them to make informed decisions and adapt.
6. Cooperation Among Cooperatives: The cooperative collaborates with others, enhancing collective strength and advocacy.
7. Concern for Community: The cooperative supports local needs and development projects, prioritizing community well-being.

Question 31

CASE STUDY
Case Study: Sarah’s Artisal Bakery

Background:
Sarah, a passionate baker with years of experience working in commercial kitchens,
decides to pursue her dream of owning her own bakery. She specializes in artisanal
bread, pastries, and cakes made from locally sourced, organic ingredients. After
careful planning and preparation, Sarah opens “Sarah’s Artisanal Bakery” as a sole
proprietorship in her local community.

Situation:
Sarah’s bakery quickly gains popularity among local residents and tourists for its
delicious and freshly baked goods. As the sole proprietor, Sarah manages all aspects
of the business, including baking, customer service, marketing, and financial
management. She takes pride in her hands-on approach and personal commitment to
delivering high-quality products and exceptional service to her customers.

Challenges:
Opportunities:
Strategies:
Outcomes:

Answer 31

Challenges:
1. Workload Management: Sarah faces challenges in managing all aspects of the business alone, including baking, customer service, marketing, and financial management.
2. Scaling Operations: With the bakery’s growing popularity, Sarah must consider how to scale her operations to meet increasing demand while maintaining quality.
3. Time Constraints: Balancing the demands of running the bakery with personal time and commitments presents a challenge for Sarah.

Opportunities:
1. Local Sourcing: Leveraging the growing interest in locally sourced and organic products, Sarah can further highlight her commitment to using high-quality ingredients.
2. Community Engagement: Building relationships with the local community and tourists presents opportunities for word-of-mouth marketing and repeat business.
3. Diversification: Expanding the product offerings beyond artisanal bread, pastries, and cakes could attract a broader customer base and increase revenue streams.

Strategies:
1. Streamlining Operations: Implementing efficient processes and systems to streamline operations and free up time for Sarah to focus on core aspects of the business.
2. Expansion Planning: Assessing options for scaling the bakery’s operations, such as hiring additional staff, expanding the menu, or considering a larger location.
3. Marketing and Promotion: Increasing visibility through targeted marketing efforts, including social media campaigns, local events, and collaborations with other businesses.

Outcomes:
1. Improved Efficiency: Implementing streamlined operations leads to increased efficiency and productivity, allowing Sarah to manage her workload more effectively.
2. Growth and Expansion: Successful expansion efforts result in increased revenue and market presence for Sarah’s bakery, further solidifying its reputation in the local community and attracting new customers.
3. Enhanced Community Connection: Continued engagement with the local community fosters strong relationships and customer loyalty, contributing to the long-term success of Sarah’s Artisanal Bakery.

Question 32

What are the major business activities?

Answer 32

1. Production
2. Sales
3. Marketing
4. Finance
5. Human Resources
6. Research and Development
7. Customer Service

Question 33

This took effect on February 23, 2019, introduced significant changes to the legal framework governing corporations in the Philippines

a corporation now has perpetual existence by default unless its articles of incorporation explicitly provide otherwise. This means that unless the articles of incorporation specify a limited term of existence, the corporation is presumed to have perpetual duration, allowing it to continue its existence indefinitely.

Answer 33

The Revised Corporation Code (Republic Act No. 11232),

Question 34

One of the notable changes is the removal of the maximum corporate term limit, which was previously set at what years? under the old Corporation Code (Batas Pambansa Blg. 68).

Answer 34

50 years

Question 35

What are the types of cooperatives?

Answer 35

1. Agricultural Cooperatives
2. Consumer Cooperatives
3. Credit Cooperatives
4. Multi-Purpose Cooperatives
5. Housing Cooperatives
6. Service Cooperatives
7. Producers’ Cooperatives
8. Transport Cooperatives
9. Workers Cooperatives