A Sole Proprietorship is the most basic type of business organization in the Philippines. It can be established by just one person, referred to as a sole proprietor. In sole proprietorship, the personal assets of the owner are held to answer for claims against the business since the business in a sole proprietorship is an extension of the owner. Hence, the assets and liabilities of the business are also the assets and liabilities of the owner.
A One Person Corporation, or OPC, is a special corporation with a single stockholder. The concept was introduced in the Philippine corporate setting by Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines. Only a natural person, trust or estate can register an OPC. The incorporator, however, shall always be a natural person of legal age. The incorporator can be the trustee, administrator or any other person exercising fiduciary duties in the case of a trust or an estate.
An OPC combines the best characteristics of a corporation and a sole proprietorship i.e. limited liability and complete dominion. Unlike sole proprietorship, an OPC has a personality distinct from the stockholder and, thus, the stockholder’s liability is limited to the amount of capital invested.
A Partnership requires two or more people who agree to contribute assets, with the intent of dividing profits among all parties involved. The partnership has a juridical personality separate and distinct from that of each of the partners.
A Corporation is comprised of many individuals (maximum of 15) who act as a single entity to advance the interest of the corporation as a whole. Corporations formed or organized by operation of law have the right of succession and the powers, attributes, and properties expressly authorized by law or incidental to its existence. It may be stock or nonstock corporations. Stock corporations are those which have capital stock divided into shares and are authorized to distribute to the holders of such shares, dividends, or allotments of the surplus profits on the basis of the shares held. All other corporations are nonstock corporations.
A Cooperative is an association of persons with a common bond of interest, who have voluntarily joined together to achieve a lawful common social or economic end, making equitable to contribution to the capital required and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principle.