for ABM students

1. Corporatio
n

2. Corporatio
n
•A separate body
consisting of at least
five individuals
treated by law as a

3. •Capacity as a legal entity
•Practically unlimited life
•Limited liability of stockholders
for corporate debts
•Wider source of capital

4. •Activities limited by the articles of
incorporation and corporate by-
laws
•Possibility of abuse of power of
officers
•Subject to more governmental

5. The formation of the
corporation requires much
work, such as contracting
people, opening accounts with
a bank and preparing

6. Promote
rOne who undertakes to form a
corporation, or causes it to be formed
for a specified purpose or purposes;
and who further undertakes to
procedure for the corporation the
capital, rights, property, and
organization necessary to achieve such

7. Cost incurred in
the formation
of the

8. Articles of
IncorporationAll corporations organized under the
Corporate Code shall file with the SEC
articles of incorporation in any of the
official languages; duly signed and
acknowledged by all the incorporators,
containing substantially the following
matters, except as otherwise prescribed
by the Corporate Code or by special law

9. 1. The name of the corporation;
2. The specific purpose or purposes for which the
corporation is being incorporated. When a
corporation has more than one stated purpose, the
article of incorporation shall state which is the
primary purpose and the secondary purpose or
purposes, provided that a nonstock corporation
may not include a purpose which would change or
contradict its nature as such;
3.The place where the principal office of the
corporation is located must be within the

10. 4. The term for which the
corporation is to exist;
5. The names, nationalities, and
residences of the incorporators;
6. The number of directors or
trustees, which shall not be less
than five (5)nor more than fifteen

11. 7. The names, nationalities, and residences of
the persons who shall act as directors or
trustees;
8. If it will be stock corporation-the amount of
its authorized capital stock in lawful money of
the Philippines, the number of shares, the par
value of each, the names, nationalities and
residences of the original subscribers, and the
amount subscribed and paid by each on hi
subscription, and if some or all of the shares

12. The Securities and Exchange Commission shall
have absolute jurisdiction, supervision, and
control over all corporations, partnerships, or
association, who are the grantees of primary
franchises and/or licenses or permits issued by
the government to operate in the Philippines; and
in the exercise of its authority, it shall have the
power to enlist the aid and support of any and all
enforcement agencies of the government, civil or

13. 9. If it will be a nonstick corporation
the amount of its capital, the names,
nationalities and residences of the
contributors and the amount
contributed by each; and
10. Such other matters which are not
inconsistent with law and which the
incorporators may deem necessary and
convenient.

14. Cooperati
ve

15. A co-operative is a member-
owned business structure with
at least five members, all of
whom have equal voting rights
regardless of their level of
involvement or investment. All
members are expected to help

16. •Easy Formation:
Compared to the formation of a company,
formation of a cooperative society is easy. Any ten
adult persons can voluntarily form themselves into an
an association and get it registered with the Registrar
Registrar of Co-operatives. Formation of a
cooperative society also does not involve long and

17. •Limited Liability:
Like company form of
ownership, the liability of
members is limited to the
extent of their capital in the
cooperative societies

18. •Perpetual Existence:
A cooperative society has a
separate legal entity. Hence, the
death, insolvency, retirement, lunacy,
lunacy, etc., of the members do not
not affect the perpetual existence of
of a cooperative society.

19. •Social Service:
The basic philosophy of
cooperatives is self-help and mutual
mutual help. Thus, cooperatives
foster fellow feeling among their
members and inculcate moral values
values in them for a better living.

20. •Open Membership:
The membership of
cooperative societies is open to
all irrespective of caste, colour,
creed and economic status.
There is no limit on maximum

21. •Tax Advantage:
Unlike other three forms of business
business ownership, a cooperative
society is exempted from income-tax
tax and surcharge on its earnings up to
to a certain limit. Besides, it is also
exempted from stamp duty and
registration fee.

22. •State Assistance:
Government has adopted
cooperatives as an effective
instrument of socio-economic
change. Hence, the Government
offers a number of grants, loans and
and financial assistance to the
cooperative societies – to make their
their working more effective.

23. •Democratic
Management:
The management of cooperative society
is entrusted to the managing committee
duly elected by the members on the basis
of ‘one-member one -vote’ irrespective of
of the number of shares held by them. The
The proxy is not allowed in cooperative

24. Disadvantages
•Lack of Secrecy:
A cooperative society has to submit its
its annual reports and accounts with the
the Registrar of Cooperative Societies.
Hence, it becomes quite difficult for it to
to maintain secrecy of its business

25. •Lack of Business Acumen:
The member of cooperative societies
generally lack business acumen. When such
members become the members of the Board
of Directors, the affairs of the society are
expectedly not conducted efficiently. These
also cannot employ the professional managers
managers because it is neither compatible with
with their avowed ends nor the limited

26. •Lack of Interest:
The paid office-bearers of cooperative
societies do not take interest in the
functioning of societies due to the absence of
of profit motive. Business success requires
sustained efforts over a period of time which,
which, however, does not exist in many
cooperatives. As a result, the cooperatives
become inactive and come to a grinding halt.

27. •Corruption:
In a way, lack of profit motive
breeds fraud and corruption in
management. This is reflected in
in misappropriations of funds by
by the officials for their personal

28. •Lack of Mutual Interest:
The success of a cooperative society
depends upon its members’ utmost trust
trust to each other. However, all members
members are not found imbued with a
spirit of co-operation. Absence of such
spirit breeds mutual rivalries among the
the members. Influential members tend
to dominate in the society’s affairs.