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Legal Aspects of Family Businesses

The document discusses small family businesses and entrepreneurship. It begins by explaining that entrepreneurs create products and services that fulfill society's needs and wants. It then defines key terms like entrepreneurship, entrepreneurial ventures, and small businesses. The document outlines the steps to start a business, including creating a business plan and registering the business with the appropriate government agencies. Finally, it discusses different forms of business ownership like sole proprietorships, partnerships, corporations, and cooperatives. The overall purpose is to explain how to start and manage a small family business.

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Billy Joe Mendillo Salumbides
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57 views8 pages

Legal Aspects of Family Businesses

The document discusses small family businesses and entrepreneurship. It begins by explaining that entrepreneurs create products and services that fulfill society's needs and wants. It then defines key terms like entrepreneurship, entrepreneurial ventures, and small businesses. The document outlines the steps to start a business, including creating a business plan and registering the business with the appropriate government agencies. Finally, it discusses different forms of business ownership like sole proprietorships, partnerships, corporations, and cooperatives. The overall purpose is to explain how to start and manage a small family business.

Uploaded by

Billy Joe Mendillo Salumbides
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

SHS

GRADE
11
ORGANIZATION AND
MANAGEMENT
QUARTER 2 – MODULE 16
The Basic Concept of Small
Family Business

1
Objectives:
At the end of this module, you are expected to:
1. Explain how to start a small-family business
2. Identify the business legal form and requirement
3. Appreciated the role of small-family business in an
improving economic status

Lesson Proper
We are ruled by the ventures of entrepreneurs. All our basic
needs, appliances gadgets and equipment and other things we use or
consume daily are all products of entrepreneurial ventures. Therefore, it is
important to recognize our dependence on the innovative and creative
nature of entrepreneurs. The important role of entrepreneurs is to
continuously look into the needs and wants to society.
Entrepreneurships – innovative, creative, risk-taking, growth-oriented
behavior that brings new opportunities for individuals or organizations to
start new business and to produce new products or services that are
beneficial to society.
Entrepreneurial Ventures – organizations that persistently pursue
opportunities are characterized by creative, innovative activities that have
service, growth, and profitability as principal goals.
Small Business – a business that has fewer than 100 – 500 workers
(depending on the prevailing commercial law in a particular country),
independently owned, operated, and financed; not always entrepreneurial in
orientation and does not dominate its industry; capital is low but capable of
producing goods or rendering services designed to satisfy particular need of
customers.

What are the Entrepreneurial Procedure?


Steps in Entrepreneurial Procedure
• Formulate the business vision and mission statements
• Segment of the market
• Find the target market
• Understand the environment
• Develop the business Plan

2
Business plan is a written description of your business’s future, a document
that tells what you plan to do and how you plan to do it. If you jot down a
paragraph on the back of an envelop describing your business strategy,
you’ve written a plan, or at least the germ of one. Business plans are
inherently strategic.
Business Plan
✓ Executive Summary
✓ Environmental Analyst
✓ Industry Analysis
✓ Market Analysis
✓ Company Description
✓ Marketing and Sales Activities
✓ Products and Services
✓ Operations
✓ Management and ownership
✓ Financial Data
✓ Time Table
• Implement and monitor the business venture
• Maximize the utilization of business resources
• Creative and Innovative - Good Planners
• Customer Oriented - Open-minded
• Flexible - Persistent
• Confident - Organized
• Updated/Well-inform - Team Players
• Knowledgeable - Risktakers

Business Registration – a government that order new business owners to


furnish government agencies with necessary information prior to the legal
operation of their business organization.
The legal form of business is determined by its ownership or proprietorship.
Family Business – a business owned and financially controlled by members
of a family
Enterprise – any projected task or work; undertaking

What are the forms of Business?


Single or Sole Proprietorship – a business owned by one person only. The
owner and the business are considered as one, meaning the owner’s income
and the business income are one and the same and the business income is
taxed as a personal income. Decision making is the sole responsibility of the

3
owner and if the business succeeds, he or she gets all the profits. If it fails,
then he or she suffers all the losses and must pay whatever debt are
incurred. The business ends upon the death of the owner or single
proprietor.
Partnership – a business formed when two or more partners formally agree
to be joint owners of a business. The resources (money and other assets)
and talents (skills, experience, and management expertise) of all involved
may be pooled together. All partners share the profits equally, unless
otherwise specified in their partnership agreement.
Corporation – a business entity involving five or more persons owning it. It
is registered and recognized by law as a “legal person” that has legal rights
and responsibilities, can sue or be sued in the court, can own and sell
properties, and can transact or enter into contracts. Corporation ownership
is divided into units known as shares of stocks and owners of these are
called stockholders. A board of directors, elected by the stockholders on a
regular basis, manage the corporation which is run according to terms
specified by their by-laws and articles of incorporation. The corporation’s life
does not end with the death of stockholder or by the selling of the stocks of
a particular stockholder.
Cooperative – a group enterprise made up of several traders, consumers, or
producers who are interested to produce or trade as a group. The
cooperatives’ original purpose was to supply those involved with goods or
services at lower costs compared to those bought from retailer. Later types
of cooperative have emerged that include farmers, producers, and credit
cooperative. A group of officers, called board of directors and committees,
headed by a chairman, manage the cooperative’s activities. The cooperative’s
life is not affected by the death of any its members nor by the selling of
member’s shares. It can, however, be dissolved by a majority vote of the
board of directors and a resolution signed by at least two thirds of the
general membership.
Government agencies where the business to be registered:
• Department of Trade and Industry (DTI)
• Securities and Exchange Commission (SEC) (Partnership and
Corporation)
• Cooperative Development Authority (CDA)
• Barangay clearance and security community Tax Certificate
• Mayor’s Permit and License to operate
• Fire Safety Clearance – Bureau of Fire Protection (BFP)
• Bureau of Internal Revenue (BIR)
• Pag-ibig Fund (Home Development Mutual Fund)
• Department of Labor and Employment (DOLE)
• Social Security System (SSS)

4
• Philippine Health Insurance Corporation (Philhealth)

Let’s learn about the Process Flow of Registering a Business

Here are the sample of Legal Form of Business

5
Activity 1
Choose the correct answer on the box below and write the answer on your
notebook.

_____________________1. Is innovative, creative, risk-taking, growth-oriented


behavior that brings new opportunities for individuals or organizations to
start new business and to produce new products or services that are
beneficial to society.
_____________________2. Are organizations that persistently pursue
opportunities are characterized by creative, innovative activities that have
service, growth and profitability as principal goals.
_____________________3. Is a business that has fewer than 100-500 workers
independently owned, operated and financed.
_____________________4. Is a written description of your business’s future, a
document that tells what you plan to do and how you plan to do it.
_____________________5. Is a government requirement that order new
business owners to furnish government agencies with necessary information
prior to the legal operation of their business organization.
The __________________6. of a business is determined by its ownership or
proprietorship.
_____________________7. A business owned by one person only.

6
_____________________8. Is a business formed when two or more partners
formally agree to be joint owners of a business.
_____________________9. Is a business entity involving five or more persons
owning it.
____________________10. Is a group enterprise made up of several traders
consumers, or producers who are interested to produce or trade as a group.
____________________11. is a business owned and financially controlled by
members of a family.
____________________12. Any project task or work; undertaking

Enterprise Family Business Single Proprietorship


Cooperative Legal Forms Business Registration

Business Plan Small Business Entrepreneurship

Corporation Entrepreneurial Venture

REFERENCES
[Link]
[Link]
[Link], family-owned business
[Link]
[Link]

Checked by:

Robert Francisco Virginia Gulinao Roldan Liwanag Antonio Basco


Principal Principal Principal Principal
JPI Sta. Maria JPI Muzon JPI Plaridel JPI San Jose

7
KEY ANSWER

ACTIVITY 1
1. Entrepreneurship
2. Entrepreneurial Ventures
3. Small Business
4. Business Plan
5. Business Registration
6. Legal Forms
7. Single Proprietorship
8. Partnership
9. Corporation
10. Cooperative
11. Family Business
12. Enterprise

Common questions

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Small family businesses play a vital role in improving economic status by providing goods and services that meet specific market needs, offering employment opportunities, and fostering entrepreneurial culture and innovation. Their independent operation and localized focus allow them to adapt to market demands and contribute to community development .

The legal forms of business organization include sole proprietorship, partnership, corporation, and cooperative. A sole proprietorship is owned by one person with complete control but personal accountability. A partnership involves joint ownership by two or more people, sharing profits and responsibilities. A corporation is a separate legal entity owned by shareholders, managed by a board of directors, and provides limited liability. A cooperative involves joint efforts of several members to produce or trade goods collectively, managed by elected officials, with shared decision-making .

An effective entrepreneurial business plan should include an executive summary, environmental and industry analysis, market analysis, company description, marketing and sales strategies, products and services overview, operational plan, management and ownership structure, financial data, and a timeline for reaching goals .

A business plan is crucial as it provides a strategic roadmap detailing what the business aims to achieve and how it will reach those goals. It includes an executive summary, market analysis, and financial data, helping entrepreneurs understand market dynamics and make informed decisions. It also serves as a tool for attracting investors and guiding operation monitoring .

Creativity and innovation benefit a small family business by enabling it to develop unique products or services, adapt to changing markets, and satisfy customer needs effectively. These attributes support long-term growth and competitive advantage, allowing businesses to explore new opportunities and respond to market trends .

A cooperative differs from other entities as its lifecycle is not dependent on the membership changes, such as a member's death or withdrawal. Decision-making is democratic, with each member having a say, unlike corporations where decision power may be proportional to shares owned. This ensures cooperatives operate with member interests as a priority .

The procedural steps to start a small family business include formulating the business vision and mission statements, segmenting the market, identifying the target market, understanding the environment, and developing a business plan. Following these steps, one must implement and monitor the business venture to maximize resource utilization .

A small family business might choose a partnership over a corporation due to the flexibility in management and the ability to pool resources and talents without the complexities of corporate regulations. Partnerships allow direct accountability and profit-sharing among partners, while avoiding the legal obligations, formalities, and expenses associated with forming and maintaining a corporation .

Small family businesses may face challenges such as succession planning, balancing family and business roles, securing funds for growth, and adapting to market changes. These enterprises may also struggle with maintaining professional standards and resolving conflicts when family dynamics interfere with business decisions .

Business registration processes include acquiring permits from government agencies such as the Department of Trade and Industry, Securities and Exchange Commission for corporations or partnerships, and other local permits from entities like the Bureau of Internal Revenue. These registrations are necessary to ensure legal operation, compliance with local and national regulations, and to protect the business legally .

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