associated with the business are the personal liabilities of
the owner, and the business terminates upon the
Masterand : Pavi Antoni D. Villaceran
Subject : Entrepreneurship
Professor : Mauro Allan Amparado, RN, MBA,
MAN, Ph.d
Topic : New Venture and the Law
Objectives:
At the end of the discussion, masterands will be able to
1. Understand the concept about New Venture
2. Illustrate the Law regarding New Venture
1. Entrepreneurship - Is an art of observing correct
practices in managing and operating a self-owned, wealth
creating business enterprise by providing goods and
services that are valuable to the customers and its a risk
taking venture
2. Entrepreneurship is vital source of employment and
growth. In the Philippines, Entrepreneurship follow the
flow of Entrepreneurial Benefits
In the given diagram, the first party to receive the benefits
of entrepreneurship is the Filipino people, which is
transferred to or shared with the local community and
goes to the Philippine Economy and flowed back.
3. TYPES OF BUSINESS VENTURE -When an
entrepreneur decides to start a new business, he or she
must choose among a variety of business entities. The
most common types include a sole proprietorship,
partnership, corporation, and limited liability company.
They range from easiest to most difficult to start and
maintain. Each entity has a specific taxation method,
management organization, and liability structure. Among
the business entities, proprietorships and partnerships
typically have the least protection, while corporations and
limited liability companies have more. Listed below are
some types of business ventures in the Philippines;
a) Sole Proprietorship
b) Partnership
c) Corporation
d) Stock or Non Stock Corporation
4. SOLE PROPRIETORSHIP - This is a business run by
one individual for his or her own benefit. It is the simplest
form of business organization. Proprietorships have no
existence apart from the owners. The liabilities
proprietor's death. The proprietor undertakes the risks of
the business to the extent of his/her assets, whether used
in the business or personally owned.
5. PARTNERSHIP- A general partnership is an
agreement, expressed or implied, between two or more
persons who join together to carry on a business venture
for profit. Each partner contributes money, property,
labor, or skill; each shares in the profits and losses of the
business; and each has unlimited personal liability for the
debts of the business.
Limited partnerships limit the personal liability of
individual partners for the debts of the business according
to the amount they have invested. Partners must file a
certificate of limited partnership
Under the Civil Code of the Philippines, a partnership
is treated as juridical person, having a separate legal
personality from that of its members. Partnerships may
either be general partnerships, where the partners have
unlimited liability for the debts and obligation of the
partnership, or limited partnerships, where one or more
general partners have unlimited liability and the limited
partners have liability only up to the amount of their
capital contributions. It consists of two or more partners.
A partnership with more than Peso 3,000 capital must
register with the Securities and Exchange Commission
(SEC). Partnership
JOINT VENTURE VS. PARTNERSHIP
Joint Venture - involves more than one investor for only a
specific short-term project an prompt division of profits.
Difference between Debt Financing and Equity investors
 Debt and equity financing are two very different
ways of financing your business.
 Debt involves borrowing money directly, whereas
equity means selling a stake in your company in the
hopes of securing financial backing.
 Both have pros and cons, and many businesses
choose to use a combination of the two financing
solutions.
6. CORPORATION- is composed of juridical persons
established under the Corporation Code and regulated by
the SEC with a personality separate and distinct from that
of its stockholders. The liability of the shareholders of a
corporation is limited to the amount of their share capital.
It consists of at least five to 15 incorporators, each of
whom must hold at least one share and must be
registered with the SEC. Minimum paid up capital is Php
5000.00. A corporation can either be stock or non- stock
company regardless of nationality. Such company, if 60%
Filipino- 40% Foreign - owned is considered a Filipino
Corporation. If more than 40% Foreign-owned, it is
considered a domestic foreign-owned corporation.

7. STOCK CORPORATION - is a corporation with
capital stock divided into shares and authorized to
distribute to the holders of such shares dividends or
allotments of the surplus profits on the basis of the shares
held.
8. NON-STOCK CORPORATION -is a corporation
organized principally for public purposes such as
charitable, educational, cultural, or similar purposes and
does not issue shares of stock to its members.
9. LEGAL ISSUES RELATED TO ENTREPRENEURSHIP
- Patent, Trademark, Servicemarks and Trade Name,
Copyright.
PATENT - is a set of exclusive rights granted by a
sovereign state to an inventor or their assignee for a
limited period of time, in exchange for the public
disclosure of the invention. An invention is a solution to a
specific technological problem, and may be a product or a
process. Patents are a form of intellectual property.
10. PATENTABLE MATTERS - Any technical solution of
a problem in any field of human activity which is new,
involves an inventive step and is industrially applicable
shall be Patentable. It may be, or may relate to a product
or process, or an improvement of any of the foregoing.
11. NONPATENTABLE INVENTIONS - The following
shall be excluded from patent protection
a) 22.1 Discoveries, scientific theories and
mathematical methods
b) 22.2 Schemes, rules and methods of performing
mental acts, playing games or doing business
and programs for computers
c) 22.3 Methods for treatment of the human or
animal body by surgery or therapy
d) 22.4 Plant varieties or animal breeds or
essentially biological process for the production
of plants and animals
e) 22. 5 Aesthetic Creations
f) 22.6 Anything which is contrary to public order
or morality
12. THE LAW ON TRADEMARKS IP CODE -Republic Act
No. 8293
Trademarks - Section 121.1 Mark means any visible sign
capable of distinguishing the goods (trademark) or
services (service mark) of an enterprise and shall include a
stamped or marked container of goods
13. TRADENAME - means the name or designation
identifying or distinguishing an enterprise
The rights in a mark shall be acquired through
registration made validly in accordance with the
provisions of this law. Sec 122.
The applicant or the registrant shall file a declaration
of actual use of the mark with evidence to that effect, as
prescribed by the regulations within three years from the
filing date of the application. Otherwise, the application
shall be refused or the mark shall be removed from the
Register by the Director Sect 124.2
14. COPYRIGHT PROTECTED WORKS-
1. Literary and artistic works are original intellectual
creations in the literary and artistic domain.
UNPROTECTED WORKS
1. Any idea
2. Procedure, system, method or operation
3. Concept
4. Principle
5. Discover
15. INTERNAL AND EXTERNAL SOURCES OF FUNDS
OF YOUR BUSINESS
- At whatever stage of growth you are in as an
entrepreneur, it is very important to explore all
possible sources of capital. When borrowing money
or raising funds from investors, you need to consider
the three important factors that could affect the
viability of the financing package, namely 1. Time
Duration, 2. Interest Rate 3. Management
participation of the funds provider
Some other references would include,
commercial banks, Small Business Administration,
Angel Investors and Venture Capitalists.
16. INDEPENDENT CONTRACTORS VS. EMPLOYEE
An independent contractor is a person, business, or
corporation that provides goods or services under a
written contract or a verbal agreement. Unlike employees,
independent contractors do not work regularly for an
employer but work as required, when they may be subject
to law of agency. Independent contractors are usually paid
on a freelance basis. Contractors often work through a
limited company or franchise, which they themselves
own, or may work through an umbrella company
17. HOW TO APPLY FOR COMMERCIAL BANK
LOANDS
a) Business Plan
i. Character- will you do everything to pay
the loan back
ii. Capacity - Access to other income
iii. Collateral - Cosign
iv. Conditions - Scan the Environment
18. BANK LOANS - If you plan to increase your working
capital requirements for your inventory, accounts
receivables or operating expense budget, Short term loan
migh be appropriate. It requires repayment within the
next 12 months.
If you are looking at financing capital expenditures, a loan
that can be repaid over the longer period of time.
19. THINGS TO CONSIDER WHEN CHOOSING THE
RIGHT LOCATION FOR YOUR BUSINESS. Important
issues to consider when choosing a location for your
business or business positioning.
Some reference will suggests on the following,
Demographics or study your segmentation or the Market
Identification Process, Foot Traffic, Accessibility,
Competition, Local Ordinances, Visibility, Synergy,
Expert suggests, before you open a business, you need
become both entrepreneurial competent and business
competent, that is to study the business environment,
both Micro and Macro Environment.
20. DEMOGRAPHICS -you should study both
prospective customers and employees in the area.
Observe if the immediate community can provide your
required customer base, plus the talents you need for your
business.
21. FOOT TRAFFIC - This issue is very important if you
want to go into retail. You may have to physically count
the number of people passing the area at different times
of the day so you may be able to plan out everything.
SPECIAL CORPORATION - Types of business may include
cooperatives, joint ventures and non-profit organization.
Are you planning to enter into business and call
yourself a businessman or entrepreneur? That sounds
great! But what do you want to be… a proprietor, partner
or stockholder? Do you want to offer a service or sale
tangible products? Before you proceed, it is wise to
consider first the different types and forms of business,
firm or enterprise that you may undertake. You should
carefully assess yourself, including your skills, financial
resources and team, to select the best kind of business to
start. To guide you, the following are the different types of
business in the Philippines you may need to consider.

22. ENTREPRENEURIAL COMPETENT - a person who
aspires to become successful entrepreneur must fully
understand and apply the concepts and principles of
entrepreneurship. He/She must possess and internalize
the character traits that are common among successful
entrepreneurs.
23. BUSINESS COMPETENT - The entrepreneur,
therefore, must properly combine the strengths in
business resources, culture, and structure in order that the
venture can do business in the industry environment.
24. NATURE OF ENTREPRENEURIAL VENTURE -an
entrepreneurial venture may also be classified according
to its nature. The term nature simply refers to whether the
business is simply selling a product, manufacturing a
product or rendering a service to customers.
The classifications of entrepreneurial venture according to
its nature are as follows.
1. Merchandising
2. Service
3. Manufacturing
4. Agriculture
5. Hybrid Business
6. Special Corporation
30. ANGEL INVESTORS AND VENTURE CAPITALIST
Angel investors and venture capitalists are two types
of equity investors that are often on the lookout for
startups with the potential to grow rapidly but require a
capital investment to do so. These are often highly
experienced, discerning investors who won't throw money
at just any project. Angel investors are high net worth
individuals who often have some sort of relationship with
the business founder, while venture capitalists are
seasoned private investors who seek out promising
startups.
To convince an angel or VC to invest, entrepreneurs
need a pro forma with solid financials, some semblance of
a working product or service, and a qualified management
team. Angels and VCs can be difficult to contact if they're
not already in your network, but incubator and accelerator
programs often coach startups on how to streamline their
operations and get in front of investors, and they may
have internal networks to draw from.

25. MERCHANDISING- Is engaged in the buying and

selling of products or goods. It does not alter the
appearance of the product purchased from the seller. The
entrepreneur engaged in a merchandising venture buys
the product in a certain form and sells it in the same form.
There is no alteration made in terms of physical
appearance, mechanical parts or chemical content.
26. SERVICE - this provides intangible goods or services
to customers. It usually generates profit by charging for
labor or other services rendered to consumers,
government or other companies
27. MANUFACTURING -this converts raw materials,
labors and overhead into finished products that are
available for sale to customers.

28. AGRICULTURE - is engaged in the production of

agricultural goods and animals. It may sell its products as
raw materials or finished goods.

29. HYBRID BUSINESS - possesses the characteristics

and nature o combined types of business entities. It is
inherent in the business to produce and sell goods and at
the same time provide services to customers.