ACCOUNTING

FORMS OF BUSINESS

There are 3 BASIC FORMS OF BUSINESS ORGANIZATION or BUSINESS OWNERSHIP

1. SOLE/ SINGLE PROPRIETORSHIP
      Owned by a single person
( single parang ikaw hahah charr )

•Owned by only one person, known as sole proprietor, who bears an unlimited liability.

• No division of profit or loss.
( wala kang ka-share)

• It is not a separate legal entity.

• You are liable for business debts.
( Utang ng negosyo ay utang mo rin )

• Business income is taxed (treated) as part of your individual.

• Your business name is just an extension of your personality.

2. PARTNERSHIP
    This is the saddest form of business dahil dito maraming pinagtagpo pero di itinadhana huhu °~° charr

• Owned by two or more persons called partners

• The details of the arrangement between the partners are outlined in a written documents called Articles of partnership

According to ART.1767
By the contract of partnership. 2 or more people bind themselves to contribute money, property or industry to a common fund with intention of dividing the profit among themselves.

• The law treats the partnership as separate legal entity.

• One equity account for each partners

• A general partner has unlimited liability whereas limited partners are liable only up to the amount of their investment

3. CORPORATION
Owned by shareholders/ stockholders who enjoy limited liability

• 15 members

• A business organized as a separate legal entity

According to SEC.2
It is an artifical being(not natural, like human being) created by operation of LAW, having the rights of SUCCESSION, and the POWERS AND ATTRIBUTES expressly authorized by law or incident to its existence.

• It is a juridical person separate from owner's

• It has its own rights and obligations

Stock (share)
A representation of ownership percentage in a corporation is evidence by a "stock certificate"

Shareholders equity
√ share capital
√ share premium
√ retained earnings

-----------------ADDITIONAL-------------------

1. COOPERATIVES
It is a legal entity owned and democratically controlled by its members.

Members often have a close association with the enterprise as producers or consumers of its products or services, or as its employees.

2. LIMITED LIABILITY COMPANY (LLC)
High breed and don't exceed in the Philippines

• It is a business structure in US

• Owner's ( members) are not liable to company creditors up to their personal assets

• Governed by US laws

• Can be composed of natural and juridical persons

• All the members have limited liability

A/n: In the next chapter we will have a quiz review related to this topic and to the next topic ^_^

I hope you understand this topic well.
Goodluck!!!Keep safe always♥️