BUSINESS ETHICS AND SOCIAL

RESPONSIBILITY
AIREEN V. VIRTUS
Teacher
 A business
owner must
decide on the
form of his
business.
The business
structure should
align with the
owner's goals and
ideas.

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Give the
correct word
as describe
by the given
clues.
You engage into this if
you want profits .
This refer to two or more
people who work together
or do business together.
 It is an organization
enjoying the rights and
duties as that of an
individual.
 A financial gain, especially the
difference between the amount
earned and the amount spent in
buying, operating, or producing
something.
 It is another term
for the owner of the
business.
OBJECTIVES:
At the end of the lesson the learners are
expected to:
[Link] the different forms of
businesses and types of business
activities;
2. Analyze the type of business of a
company.
[Link] the advantages and disadvantages of
each form of business organization..
 BUSINESS
is an activity that is part and
parcel of human society: it is
an entity in which economic
resources or inputs, such as
materials and labor, are put
together and processed to
provide goods and services
or outputs to customer.
SOME EXAMPLE OF BUSINESSES HERE IN THE
PHILIPPINES:
 PROFIT
refers to the difference
between the amount
received and the
amount spent on
something purchased,
produced, or
manufactured.
CHOOSE ME!

A B C
 FORMS OF BUSINESS ORGANIZATIONS

SOLE
PROPRIETORSHIP
● owned and managed
by a single individual

● Complete legal liability

of the owner who has
unlimited power over
the business.
SOLE PROPRIETORSHIP
Advantages:
a. tax preparation faster and easier
b. lower startup costs and license fees
c. handling money is easier
d. have the least government rules and
regulation that affect them.
e. can own the business for as long as he/she
wants, and when he/she wants to move out,
he/she can cash in and sell the business.
f. Can pass the business down to his/her heir.
SOLE PROPRIETORSHIP
Disadvantages:
a. The sole proprietor is personally liable
for all debts and actions of the enterprise.
b. There is lack of financial control
because of looser structure of sole
proprietorship.
c. There could be difficulty in raising
capital.
 The Secret Ingredient

Example:

Anna owns a home restaurant. She buys

the ingredients, prepares the food, and sells
them to her customers.

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 The Secret Ingredient

One day, Anna discovers that she forgot

to buy a vital ingredient for her Beef Caldereta Special. It will
not taste the same without that specific item, and her
customers will be disappointed if they notice. She thus
decides to change the menu for that day. It is easy for her to
do that because she needs no approval from anyone.

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 FORMS OF BUSINESS ORGANIZATIONS

PARTNERSHIP
A business partnership
binds two or more people
into contributing money,
property, or industry to set
up a business.

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 FORMS OF BUSINESS ORGANIZATIONS

PARTNERSHIP
Three types:
1. General partnership
2. Limited partnership
3. Limited liability
partnership

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 FORMS OF BUSINESS ORGANIZATIONS

PARTNERSHIP
Limited Liability
General partners Limited partners
Partnership
directly involved in not involved/have
Participation management operations minimal control over
operations

legally liable for protected from company only be legally liable for
Liability business debts debts but liable for the operations they
investments directly handle

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 Advantages:
a. Partnership business lacks formality as compared with
PARTNERSHIP managing a limited company or corporation.
b. It is easy to start. The partnership may be created either
verbally or in writing.
c. You share the burden. You have companion and
support.
d. Every partner would add his/her own expertise, skills,
experience, and connections to the business, thus
giving it a greater chance of success.
e. There is better decision-making. Two heads are better
than one.
f. The partners own and control the business.
g. The more partners there are, the more funds are
available in the company, which can be used for
possible expansion. Its borrowing capacity is also likely
to be higher.
h. There is an easy access to profits in a business
partnership. The partners just must divide the profits.
 Disadvantages:
PARTNERSHIP [Link] business does not have any
independent legal status.
[Link] business has no separate
legal personality, so the partners
are personally liable for the debts
and losses incurred.
[Link] is a potential of differences
and conflicts.
[Link]-making can be slower
because there is a need for
consultation among partners.
 FORMS OF BUSINESS ORGANIZATIONS

CORPORATION
can sign contracts, borrow
and lend money, sue and
be sued, hire people, own
assets, and pay taxes

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 FORMS OF BUSINESS ORGANIZATIONS

CORPORATION
SHAREHOLDER
● separate legal entity from its ● A PERSON,
shareholders COMPANY, OR
ORGANIZATION
THAT OWNS A
STOCK OF A
CORPORATION

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 FORMS OF BUSINESS ORGANIZATIONS

CORPORATION
● can borrow large amounts BONDS
of money from banks ● LOANS MADE BY
● sell bonds to investors
AN INVESTOR TO
A COMPANY

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 FORMS OF BUSINESS ORGANIZATIONS

Corporation
ADVANTAGES DISADVANTAGE
S
● Limited liability of ● pays its own taxes
shareholders ● difficult upkeep due to many
● has to more financial processes concerning many
resources shareholders

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 Disadvantages:
CORPORATION a. The corporation pays taxes on its
income depending on its type and
Advantages: the shareholders pay dividend taxes,
a. The liability of the so income get taxed twice.
shareholders of a corporation is b. The management team of a
limited up to the amount of their corporation can operate the
investments. business without any real oversight
b. A publicly held corporation from the owners.
may sell shares or issue bonds to
raise substantial amounts.
c. It is easy for a shareholder to
sell shares in a corporation.
d. A corporation’s life has no
limit, ownership can pass through
many generations.
THREE TYPES OF BUSINESS

1. Service Businesses
2. Merchandising Businesses
3. Manufacturing Businesses
 TYPES OF BUSINESS

SERVICE
BUSINESSES
● deliver intangible
products
● offer professional
skills, expertise,
skilled labor, and
other essential
assistance

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 SERVICE BUSINESSES

Example: tutoring

delivery services

Computer repair
laundry services spa
 TYPES OF BUSINESSES

Categories of Merchandising Businesses

● Wholesalers that buy from manufacturers to resell.

● Retailers that buy from wholesalers or manufacturers.

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 TYPES OF BUSINESS

MERCHANDISING
BUSINESSES

● deliver tangible products

● resell items for a profit

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MERCHANDISING
BUSINESSES
Example:

Supermarkets
 TYPES OF BUSINESS

MANUFACTURING
BUSINESSES MASS-PRODUCE
● mass-produce tangible - TO PRODUCE
commodities delivered GOODS IN
to wholesalers and QUANTITY
retailers
COMMODITIES
- ECONOMIC
GOODS
 MANUFACTURING
BUSINESSES
Example:

Cosmetics
manufacturing

candle manufacturing
Shoe manufacturing
Wine production
Keep in Mind

● Business organizations exist to meet the needs, wants, and demands of

their customers. Businesses benefit when consumers buy their goods and
avail of their services.
● Business structures differ based on the degree of ownership, liability,
funding sources, and distribution of profit. The forms of business
organizations are sole proprietorship, partnership, corporation and limited
liability company.
● The types of businesses according to activity are service, manufacturing,
and merchandising.
Keep in Mind

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