Business Studies - Junior Secondary 1 - Forms of business organization
Forms of business organization
Forms of business organization
TERM: 2ND TERM
WEEK SEVEN
Class: Junior Secondary School 1
Age: 12 years
Duration: 40 minutes of 5 periods each
Date:
Subject: BUSINESS STUDIES
Topic: FORMS OF BUSINESS ORGANIZATION
SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to
I.) Explain the Features of each Types of Business Organization
II.) Enumerate the Advantages and Disadvantages of each Form of Business
INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source
INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures,
INSTRUCTIONAL PROCEDURES
PERIOD 1-2
|
PRESENTATION |
TEACHER’S ACTIVITY |
STUDENT’S ACTIVITY |
|
STEP 1 INTRODUCTION |
The teacher explains the Features of each Types of Business Organization |
Students listens attentively to the teacher |
|
STEP 2 EXPLANATION |
Teacher enumerate the Advantages and Disadvantages of each Form of Business |
Students exhibit attentiveness and active engagement |
|
STEP 3 NOTE TAKING |
The teacher writes a summarized note on the board |
The students copy the note in their books |
NOTE
FORMS OF BUSINESS ORGANIZATION
A business organization refers to a legal entity formed to engage in commercial, industrial, or professional activities. It is structured to achieve specific goals, such as profit maximization, providing goods or services, or fulfilling social objectives. Business organizations can vary in size, scope, ownership structure, and legal requirements based on their type and industry.
Features of Each Type of Business Organization
There are several types of business organizations, each with distinct features:
Features:
- Owned and operated by a single individual (sole proprietor).
- Simplest form of business organization.
- Owner has complete control over decision-making.
- Personal liability: Owner is personally liable for business debts and obligations.
- Taxation: Business income is taxed as personal income of the owner.
Features:
- Owned by two or more individuals (partners) who share profits, losses, and management responsibilities.
- Partnership agreement outlines roles, responsibilities, profit-sharing, and decision-making.
- Personal liability: Partners are jointly and severally liable for business debts and obligations.
- Taxation: Partnerships are pass-through entities, where profits are taxed at the partners' individual tax rates.
Features:
- Legal entity separate from its owners (shareholders).
- Ownership is represented by shares of stock.
- Managed by a board of directors elected by shareholders.
- Limited liability: Shareholders' liability is limited to their investment in the corporation.
- Taxation: Double taxation (corporate profits taxed at the corporate level, dividends taxed at the individual shareholder level).
Features:
- Hybrid entity combining features of a corporation and partnership.
- Owners are called members, and management can be structured as member-managed or manager-managed.
- Limited liability: Members' personal assets are generally protected from business liabilities.
- Taxation: LLCs can choose to be taxed as a partnership (pass-through taxation) or corporation.
Advantages and Disadvantages of Each Form of Business
Advantages
- Easy and inexpensive to start.
- Owner retains full control and decision-making authority.
- Minimal regulatory requirements.
Disadvantages:
- Unlimited personal liability for business debts.
- Limited access to capital and resources.
- Potential difficulty in attracting skilled employees or partners.
Advantages
- Shared decision-making and resources.
- Access to diverse skills, knowledge, and resources of partners.
- Pass-through taxation.
Disadvantages:
- Unlimited liability for partners.
- Potential for conflicts and disagreements among partners.
- Dissolution of partnership with changes in partner status.
Advantages
- Limited liability for shareholders.
- Access to capital through issuance of stocks.
- Perpetual existence independent of shareholders.
Disadvantages:
- Double taxation of profits (at corporate and individual levels).
- Complex regulatory requirements and compliance obligations.
- Potential for shareholder disputes and agency problems.
Advantages:
- Limited liability for members.
- Flexibility in management structure and profit distribution.
- Pass-through taxation (if elected).
Disadvantages:
- More complex to establish compared to sole proprietorships and partnerships.
- State-specific regulations and reporting requirements.
- Potential for disputes among members regarding management and decision-making.
EVALUATION: 1. Explain 2 Features each of all the types of Business Organization
CLASSWORK: As in evaluation
CONCLUSION: The teacher commends the students positively