- Information
- AI Chat
(BE) 01 Handout 1 - i love you
Theoretical foundation of nursing (TFN1)
Riverside College
Recommended for you
Students also viewed
Preview text
01 Handout 1 *Property of STI
THE ROLE OF BUSINESS IN SOCIAL AND ECONOMIC DEVELOPMENT
Basic Forms of Business Organizations
What is Business?
A business is an organization or economic system where goods and services are exchanged for one another or for money. Every business requires some form of investment and enough customers to whom its output can be sold on a consistent basis to make a profit. Business can be privately owned, not-for- profit, or state-owned (Camilar-Serrano, 2016).
Basic Forms of Business Organizations
- Sole Proprietorship – Also known as a sole trader, is owned by one person and operates for their benefit. The owner may operate the business alone or with other people. A sole proprietor has unlimited liability for all obligations incurred by costs or judgments against the business. All assets of the business belong to a sole proprietor, including, for example, a computer infrastructure, any inventory manufacturing equipment, and/or retail fixtures, as well as any real property owned by the business (Camilar-Serrano, 2016).
The vast majority of small businesses start out as sole proprietorships. These firms are owned by one person, usually the individual who has day-to-day responsibility for running the business. Sole proprietorships own all the assets of the business and the profits generated by it. They also assume complete responsibility for any of its liabilities or debts (Cortez, 2016).
Advantages of a Sole Proprietorship (Camilar-Serrano, 2016)
Easiest and least expensive form of ownership to organize.
Sole proprietors are in complete control, and within the parameters of the law, may make decisions as they see fit.
Profits from the business flow-through directly to the owner’s personal tax return.
The business is easy to dissolve if desired.
Disadvantages of a Sole Proprietorship (Camilar-Serrano, 2016)
Sole proprietors have unlimited liability and are legally responsible for all debts against the business. Their business and personal assets are at risk.
Maybe at a disadvantage in raising funds and are often limited to using funds from personal savings or consumer loans.
May have a hard time attracting high-caliber employees or those that are motivated by the opportunity to own a part of the business.
Some employee benefits such as owner’s medical insurance premiums are not directly deductible from business income (only partially as an adjustment to income).
- Partnership – It is a business owned by two (2) or more people. In most forms of partnerships, each partner has unlimited liability for the debts incurred by the business. In a partnership, the partners should have a legal agreement that sets forth how decisions will be made, where profits will be shared, disputes will be resolved, how future partners will be admitted to the partnership when needed; Yes, it is hard to think about a “break-up” when the business is a defined process, there will be even greater problems. They also must decide up front how much time and capital each will contribute (Cortez, 2016).
Advantages of a Partnership (Camilar-Serrano, 2016)
Partnerships are relatively easy to establish; however, time should be invested in developing the partnership agreement.
With more than one owner, the ability to raise funds may be increased.
01 Handout 1 *Property of STI
The profits from the business flow directly through to the partners’ personal tax returns.
Prospective employees may be attracted to the business if given the incentive to become a partner.
The business usually will benefit from partners who have complementary skills.
Disadvantages of a Partnership (Camilar-Serrano, 2016)
Partners are jointly and individually liable for the actions of the other partners.
Profits must be shared with others.
Since decisions are shared, disagreements can occur.
Some employee benefits are not deductible from business income on tax returns.
The partnership may have a limited life; it may end upon the withdrawal or death of a partner.
- Corporation – The owners of a corporation have limited liability, and the business has a separate legal personality from its owners. Corporations can be either government-owned or privately owned. They can organize either for profit or as not-for-profit organizations. A privately owned, for-profit corporation is owned by its shareholders, who elect a board of directors to direct the corporation and hire its managerial staff. A privately owned, for-profit corporation can be either privately held by a small group of individuals or publicly held, with publicly traded shares listed on a stock exchange (Cortez, 2016).
Advantages of a Corporation (Camilar-Serrano, 2016)
Shareholders have limited liability for the corporation’s debts or judgments against the corporation.
Generally, shareholders can only be held accountable for their investment in the stock of the company.
Corporations can raise additional funds through the sale of stock.
A corporation may deduct the cost of benefits it provides to officers and employees.
Disadvantages of a Partnership (Camilar-Serrano, 2016)
The process of incorporation requires more time and money than other forms of organizations.
Corporations are monitored by the government and some local agencies, and as a result, may have more paperwork to comply with regulations.
Incorporating may result in higher overall taxes. Dividends paid to shareholders are not deductible from business income; thus, this income can be taxed twice.
- Cooperative – Often referred to as a “co-op”, a cooperative is a limited liability business that can organize for-profit or non-profit. A cooperative differs from a corporation in that it has members, not shareholders, and they share decision-making authority.
A cooperative is a business organization owned by a grouped of individuals and is operated for their mutual benefit. The persons making up the group are called members. Cooperatives may be incorporated or unincorporated (Cortez, 2016).
Advantages of a Cooperative Organization (Camilar-Serrano, 2016)
Generally inexpensive to register.
A cooperative organization is owned and controlled by members.
Members have an equal vote at general meetings regardless of their level of investment or involvement: one member, one vote.
All members must be active in the co-operative.
01 Handout 1 *Property of STI
Purpose of Establishing a Business Enterprise (Camilar-Serrano, 2016)
Why Start a Business?
To make money and have financial independence
To be your own boss
To self-actualize / To fulfill own interest and enjoyment
To Make Dreams Come True
To use your skills and knowledge for yourself
To have a second career
To have a variety at work
To create opportunities
To take up a challenge
To employ relatives, friends, and community members
To come up with better ways, to create, to innovate
To be efficient
To set and meet own deadlines
To avoid commuting
To create a customer
To offer value
To have more life, more freedom
To solve problems
To move society, to change the world, to make the world better
To build our future
Core Principles in Business Operations (Accountingverse, n.)
- Fairness – Refers to the level of even-handedness in dispensing justice, whereby claims are recognized in the order of their legal and contractual priority. Justice means giving each person what he or she deserves or, in more traditional terms, giving each person his or her due. Justice and fairness are closely related terms that are often today used interchangeably.
Justice usually has been used regarding a standard of rightness, and fairness often has been used with regard to an ability to judge without reference to one’s feelings or interest; fairness has also been used to refer to the ability to make judgments that are not overly general but that are concrete and specific to a particular case.
a. Principles of Justice
“Individuals should be treated the same unless they differ in ways that are relevant to the situation in which they are involved.”
b. Different Kinds of Justice
Distributive Justice – Refers to the extent to which society’s institutions ensure that benefits and burdens are distributed among society’s members in ways that are fair and just.
Retributive or Corrective Justice – Refers to the extent to which punishments are fair and just.
01 Handout 1 *Property of STI
- Compensatory Justice – Refers to the extent to which people are fairly compensated for their injuries by those who have injured them; just compensation is proportional to the loss inflicted on a person.
- Accountability – The obligation of an individual or organization to account for its activities, accept responsibility for them, and to disclose the results in a transparent manner.
Corporate Accountability refers to the act of being accountable to the stakeholders of an organization, which may include shareholders, employees, suppliers, customers, the local community, and even the particular country that the firm operates in.
Accountability is often used synonymously with responsibility, blameworthiness, and liability. As an aspect of governance, accountability has been central to discussions related to problems in the public, non-profit, and corporate sectors.
- Transparency – Refers to the lack of hidden agendas and conditions, accompanied by the availability of full information required for collaboration, cooperation, collective decision making. Transparency is the essential condition for a free and open exchange whereby the rules and reasons behind regulatory measures are fair and clear to all participants.
Corporate transparency describes the extent to which a corporation’s actions are observable by outsiders. This is the consequence of regulation, local norms, and the set of information, privacy, and business policies concerning corporate decision-making and operations openness to employees, stakeholders, shareholders, and the general public.
Transparency, in a business or governance context, is honesty and openness. Transparency and accountability are generally considered the two (2) main pillars of good corporate governance.
- Stewardship – Originally made up of the tasks of a domestic steward, from stig (house, hall) and weard, (ward, guard, guardian, keeper). Stewardship, in the beginning, referred to the household servant’s duties for bringing food and drink to the castle’s dining hall. A steward is a person employed to manage another’s property.
In business, it has been used by the CEOs to denote the concept that “as a steward, you try to leave the company in better shape for your successor than it was handed over to you by your predecessor.”
Common Practices in Business Organizations (Camilar-Serrano, 2016)
Business practice is a method, procedure process, or rule employed or followed by a company in the pursuit of its objectives. The business practice may also refer to these collectively.
A. Decorum – A behavior that is socially correct, calm, and polite.
On-Time and Promptness – The way to exhibit professionalism is to consistently be punctual.
On Preparation – Must be prepared to conduct a business at hand.
On Attire and Appearance – Good business etiquette includes dressing appropriately.
On Basic Courtesy and Respect – Consider the feelings of others and address conflicts in a straightforward and impersonal manner.
On Greetings – Standard greetings are an exchange of handshakes and a smile.
On Formal and Informal Address – Start out by addressing a new business acquaintance by his or her family name.
On Speaking in Meetings – Keep the meeting organized by only speaking when you have the floor.
On Listening – Listen attentively to the meeting and take notes.
On Cell Phones and Laptops – Turn off your cellphone or set your phone to vibrate if you are expecting an urgent call prior to the start of the meeting. Lower the screen of your laptop so that you do not obstruct anyone’s view.
01 Handout 1 *Property of STI
Newspaper Directories
Magazine Outdoor and Transit
Radio Direct Mail, Catalogs, and Leaflets
Television Online
E. Marketing – The process of product development as well as sales, promotion, and distribution. The whole concept of marketing revolves around the customer. In marketing, the needs of the customer come first.
F. Bookkeeping – Accounting, simply put, is keeping track of money. The most basic activity in accounting is bookkeeping. Bookkeeping is the process of recording all financial transactions to keep track of the cash flow.
G. Reportorial Requirements – Business reporting or enterprise reporting is the public reporting of operating and financial data by a business enterprise. There are so many kinds of reports, but what is usually required by governments and regulating agencies are the Annual Report and Financial Statement.
- Annual Report – A comprehensive report on a company’s activities throughout the preceding year. Annual reports are intended to give shareholders and other interested people information about the company’s activities and financial performance. An annual report usually includes:
General Corporate Information Accounting Policies Balance Sheet Cash Flow Statement Non-audited Information Profit and Loss Account Notes to the Financial Statements
Chairperson’s Statements
Director’s Report
Operating and Financial Review
Other Features
Auditor’s report
- Financial Statement – Also known as a financial report, it is a formal record of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form, easy to understand. They typically include basic financial statements, accompanied by a management discussion and analysis: A balance sheet, an income statement, and a statement of changes in equity.
H. Documentation – Refers to the process and items which serve as evidence for the validity or truth of a certain claim or statement. It is necessary for the conduct of any business, transaction, or project. It serves as a record of every official action taken and may come in very handy in the future, should a chronological account of events be necessary for legal or business purposes.
Why is a Code of Ethics Important? (Cortez, 2016)
A company’s ethics should reflect the company’s mission and must be communicated to those who are carrying out the mission. Service industries is a “people business” ethics deal with relationships with other people. For this reason, a code of ethics is mandatory for this kind of people enterprise whose managers want to achieve a unified direction and a satisfactory level of control over the conduct of business.
REFERENCES Accountingverse. (n.). Retrieved December 10, 2020, from Accountingverse website: accountingverse/accounting-basics/types-of-businesses.html
Camilar-Serrano, A. O. (2016). Business Ethics and Social Responsibility. Manila: Unlimited Books Library Services & Publishing Inc.
Cortez, F. G. (2016). Business Ethics and Social Responsibility. Quezon City: Vibal Group, Inc.
(BE) 01 Handout 1 - i love you
Course: Theoretical foundation of nursing (TFN1)
University: Riverside College
- Discover more from: