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Stuff > Session 2: Nature and Forms of Business Organizations > Flashcards

Session 2: Nature and Forms of Business Organizations Flashcards

1
Q

an organization or economic system where goods and services are exchanged for one another or for money

A

Business

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2
Q

also known as an enterprise, agency, or a firm, is an entity involved in the provision of goods and/or services to consumers

A

Business

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3
Q

can refer to an organization or to an entire market sector

A

Business

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4
Q

an entity formed for the purpose of carrying on commercial enterprise

A

Business Organization

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5
Q

The use of property bears a social function, and all economic agents shall contribute to the common good. Individuals and private groups, including corporations, cooperatives, and similar collective organizations, shall have the right to own, establish, and operate economic enterprises, subject to the duty of the State to promote distributive justice and to intervene when the common good so demands. (1987 Philippine Constitution, Art. XII)

A

Section 6

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6
Q

renders to its clients in exchange for a fee

A

Services

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7
Q

engaged in the purchase and sale of goods and earns profit by adding a mark up to the cost of goods it is selling

A

Merchandising

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8
Q

raw materials are transformed to finished goods that are sold at a price

A

Manufacturing

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9
Q

owned by one person and operates for their benefit. The owner may operate the business alone or with other people

A

Sole Proprietorship

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10
Q

simplest organization to form

A

Sole Proprietorship

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11
Q

no legal distinction between the owner and the business

A

Sole Proprietorship

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12
Q

decision-making is centralized

A

Sole Proprietorship

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13
Q

life of the business ends when owner dies

A

Sole Proprietorship

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14
Q

can provide protection and peace of mind while allowing you to remain a sole proprietor

A

Business Insurance Policy

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15
Q

Single/sole proprietorships are registered with the __________ __ _____ ___ ________

A

Department of Trade and Industry

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16
Q

owned by two or more people

A

Partnership

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17
Q

has unlimited liability for the debts incurred by the business

A

Partnership

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18
Q

main purpose is the pooling of resources

A

Partnership

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19
Q

no legal distinction between the business and the owner

A

Partnership

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20
Q

based on legal agreement or is a valid contract (a partnership agreement)

A

Partnership

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21
Q

delectus personae

A

Partnership

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22
Q

time should invest in developing the partnership agreement

A

Advantage of a Partnership

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23
Q

there is more money available

A

Advantage of a Partnership

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24
Q

more “heads” contribute to the success of the business

A

Advantage of a Partnership

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25
Q

losses are shared among the partners and risk are also shared

A

Advantage of a Partnership

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26
Q

planning and problem-solving are participatory

A

Advantage of a Partnership

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27
Q

prospective employees may be attracted to the business. If given the incentive to become a partner

A

Advantage of a Partnership

28
Q

control of the business is shared and is thus limited

A

Disadvantage of a Partnership

29
Q

profits are shared and are thus reduced

A

Disadvantage of a Partnership

30
Q

consequences of a poor decision made by a partner affect the other partners

A

Disadvantage of a Partnership

31
Q

liability for debts is unlimited

A

Disadvantage of a Partnership

32
Q

property invested becomes join property of all

A

Disadvantage of a Partnership

33
Q

As many as __ people can join together in a partnership

A

20

34
Q

The Articles of Partnership is registered with the __________ ___ ________ which exercises regulatory power over partnerships.

A

Securities and Exchange Commission

35
Q

have limited liability and the business has a separate legal personality from its owners

A

Corporation

36
Q

can be either government-owned or privately owned

A

Corporation

37
Q

can organize either for profit or as non-profit organizations

A

Corporation

38
Q

Corporations are governed by _____ _________ ______ __ known as the Corporation Code of the Philippines.

A

Batas Pambansa Bilang 68

39
Q

A corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence

A

Sec. 2. Corporation Defined

40
Q

corporation exists as an artificial person It is called artificial because it is created by virtue of law, BP 68, unlike natural
persons who come into existence by birth. As a person, it has a personality that is separate and distinct from that of the stockholders or owners. Also as a person, it has rights that are given it also by the corporation code

A

Corporate Personality

41
Q

a stockholder may sell his/her share of stocks and all the rights pertaining to the shares are transferred to the buyer of those shares. When the stockholder dies, the shares are transferred to his/her heirs

A

Power of Succession

42
Q

a corporation may file a case by itself. By the same vein, a case may be filed against it in its own name. Since it is an artificial being, it will be represented by its officers

A

The Right to Sue and be Sued in the Corporate Name

43
Q

since the corporation has a separate personality from that of its stockholders, it also has a separate liability from them. Meaning, if the corporation suffers loss and liability, only the properties of the corporation will be used to pay its debts and creditors.

A

Separate Liability that of Stockholders

44
Q

capital is divided into shares and is authorized to distribute surplus profit to its owners called stockholders. A stockholder is entitled to votes equivalent to the number of his shares

A

Stock Corporation

45
Q

capital is not divided into shares; are prohibited from distributing any surplus profit to its owners

A

Non-stock Corporation

46
Q

Where to register stock or non-stock?

A

Securities and Exchange Commission

47
Q

Requirements of Corporation Registration

A
  1. at least 5 incorporators who are natural persons
  2. legal of age
  3. have the capacity to contract
48
Q

capital is easily raised

A

Advantages of a Corporation

49
Q

liability for debts of the business is limited to your share capital

A

Advantages of a Corporation

50
Q

tasks need to be done by the owners but by hired employees

A

Advantages of a Corporation

51
Q

owners, without approval of the board of directors, can’t do major decisions

A

Disadvantages of a Corporation

52
Q

corporate and individual profits, int he form of dividends, are separately taxed

A

Disadvantages of a Corporation

53
Q

more rules and regulations to comply with

A

Disadvantages of a Corporation

54
Q

more expenses are involved

A

Disadvantages of a Corporation

55
Q

a group of individuals, elected to represent shareholders

A

Board of Directors

56
Q

establish policies for corporate management and oversight, making decisions on major company issues

A

Board of Directors

57
Q

a business or organization owned by and operated for the benefit of those using its services

A

Cooperative

58
Q

to provide goods and services to its members and thus enable them to attain increased income and savings, investments, productivity, and purchasing power and promote among them equitable distribution of net surplus through maximum utilization of economies of scale, cost-sharing and risk-sharing without, however, conducting the affairs of the cooperative for eleemosynary or charitable purposes

A

Cooperative

59
Q

shall provide maximum economic benefits to its members, teach them efficient ways of doing things in a cooperative manner, and propagate cooperative practices and new ideas in business and management and allow the lower income groups to increase their ownership in the wealth of this nation

A

Cooperative

60
Q

The Articles of Cooperation is filed with the ____________ ____________ _________ which exercises regulatory power over cooperatives

A

Cooperative Development Authority

61
Q

capital is easily raised

A

Advantages of a Cooperative

62
Q

liability is limited

A

Advantages of a Cooperative

63
Q

more people benefit from profits earned

A

Advantages of a Cooperative

64
Q

owners may employ managers with relevant qualifications

A

Advantages of a Cooperative

65
Q

it may be tax-exempted

A

Advantages of a Cooperative

66
Q

control of the business is shared

A

Disadvantages of a Cooperative

67
Q

ideas and decisions made by the board have to be accepted by the general membership

A

Disadvantages of a Cooperative

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