Business Structure Basics to Help You When You Finally Register

No one got rich from working the regular 8-5 every single day. Some people are just used to it and are afraid to get out of the box and some are simply contended of what they are earning.

While it is easy to say “I want to have my own business, my own company where I can control everything, I am the boss,” it might be a classic case of “easier said than done.”

The pandemic has greatly devastated the business sector as closures are observed everywhere and layoffs are occurring in almost every region in the country. The overall economic output of the Philippines also took a huge hit as the biggest quarterly plunge was seen in the Q2 of 2020, with the total GDP outlook for the country now expected to go down by as much as 7%.

While the country’s economy may seem to be in shambles, creativity has immensely grown as people have gotten out of their comfort zone to start various businesses in order to earn a living while on lockdown. These businesses have taken advantage of the digital world and the online market that the country has through social media.

Should these businesses continue to operate even after the quarantine period and the Philippines set on the “new normal,” at some point, businesses will have to be registered–and that includes the business structure.

Business Structures

There are three kinds of business structures in the Philippines namely:

• Corporation
• Sole Proprietorship and,
• Partnership

Corporation comprises of many individuals who act as a one legal entity. They also advance the interest of the corporation as a whole. A corporation also sells the shares of ownership called “stock” through stock holders.

Creditors in a corporation may also go beyond the corporation’s assets to satisfy their claims

Sole Proprietorship is what most Filipinos do today. This type of business can be established and managed by one person meaning only one person is the owner of the said business. The individual who owns this kind of business is called a sole trader or sole proprietor.

And lastly, the partership. From the word “partnership” itself it requires two or more parties who agree to contribute to the business and divide profits. The parties will be the one to oversee the business operations and they will also share the liabilities aside from the profit. Individuals in this type of business are called “co-owners” as you share everything in a specific business.

Entrepreneurs entering the partnership business will be called partners, or collectively a “firm”.

Meanwhile, starting a business isn’t free, you have to acquire or secure your own capital or “Puhonan”(Filipino term) or you can just apply for a loan in the bank.

It’s safe to say that starting a business is the hardest part of the journey since it requires you to come up with a unique idea to stand out among others. It is you who can make a difference and make money out from your business. (MLC)