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DIFFERENCE BETWEEN FOUR JURIDICAL PERSONALITIES
As to Power
Sole proprietorship offers significant freedom and flexibility for the owner. They
have a complete control over all aspects of business, including decision-making on daily
operations, marketing, hiring, and financial management. It also possessed contractual
capacity and business conduct wherein they have the freedom to determine how the
business operates, within legal boundaries and any contractual obligations.
Partnership, it is a way for two or more people to combine resources and
expertise to run a business. Just like in sole proprietorship, they can also enter
contracts to buy and sell goods and services, hire employees, and lease property. Aside
from that, they can own real estate, equipment, and other assets jointly.
Corporations have the broadest legal and operational powers among the different
business structures. It includes property ownership -- which means they can own real
estate, equipment, and intellectual property, financial management, profit generation,
subsidiary creation as well as contractual capacity.
Cooperatives have a unique set of powers that blend some aspects of
corporations with a focus on member benefits and social impact. Their decision-making
and control are often exercised through a democratic voting system. In comparison to
corporation that prioritizes shareholder profit, cooperatives share any surplus earnings
to their members after deducting expenditures. Rather than only considering money
contributions, this distribution frequently considers the members’ engagement or
patronage, or the volume of business they do with cooperative.
Juridical Personality
A sole proprietorship lacks a legal identity that is distinct from that of its owner.
This indicates that the owner and the company are regarded as a single legal entity.
Partnership, corporation, and cooperative has a distinct juridical personality separate
and distinct from its owners which means they can have own property in its own name,
sued and be sued in its own name, and enter contracts in its own name.
Duties and Obligations of Person Comprising the Juridical Personality

In sole proprietorship, since it lacks a legal identity that is distinct from that of its
owner, the sole proprietor shoulders management and operations, financial obligations,
legal compliance, and reporting requirements.
The duties and obligations of partners in a partnership divide into two category,
the general and fiduciary duties. In general duties, partners owe a duty of loyalty and
good faith to each other and to the partnership. They are expected to contribute their
skills and knowledge, and exercise reasonable care in managing the business. They
have the right to share information to each other and to share in profits and losses
according to the partnership agreement. In fiduciary duties, in includes duty of care and
duty of loyalty similar to the duties of officer and director of a corporation.
While in corporation, shareholders and officers and directors have different duties
and obligations. Shareholders, in some jurisdiction, controlling them may be held to a
fiduciary duty to act in best interests of the corporation, not just their own interests.
Officers and directors exercise corporate powers as well as fiduciary duties which
includes duty of care, duty of loyalty, and duty of obedience. They are also responsible
for ensuring the compliance of the corporation with relevant regulations.
Cooperative is composed of members, board of directors, and officers. All
members are responsible for capital contribution, patronage, democratic participation,
and following cooperative principles. On the other hand, board of directors are
responsible for providing leadership and setting the strategic direction for the
cooperative. Aside from that, the board should conduct business with the cooperative’s
principles and mission. Lastly are the officers, who manages the cooperative’s day-to-
day operations. They are typically accountable to the board and responsible for
providing accurate financial and operational reports.
As to the Form of Decision Making

Given that a sole proprietor is the only owner of a sole proprietorship, they enjoy
the advantage of independent decision-making.
In partnership, partners can establish a different decision-making process in a
written agreement which can include unanimity, majority vote threshold, designated
decision-making authority, and procedures for dreadlocks. Unanimity requires all
partners agreement for any decision. While procedure for dreadlocks outlines methods
for resolving disagreements if partners cannot reach a majority vote.
In corporation, the decision by the board is typically made by a majority vote of
the directors present, provided a quorum is present.
A cooperative core principle is democratic member control which means
members generally have equal voting rights, following the principle of “one member, one
vote” regardless of their capital contribution.
IF YOU WILL ESTABLISH A BUSINESS, WHAT JURIDICAL PERSONALITY WILL

YOU CHOOSE AND WHY?
As a beginner and a person who lacks enough resources and experiences in

managing a business, I would choose to establish sole proprietorship. As we all know,
this kind of business structure is the simplest and least expensive to form and maintain.
It doesn’t involve complex and legal filing procedures when establishing. It is also
relatively inexpensive to maintain because I won’t have annual fees associated with
complex structures like corporations. Another thing is I have complete control over all
aspects of business which I think is the best feature of this business structure as an
introvert. I think it suits me very well because I am not good in working with other
people, I feel pressured and overwhelmed, and I am still working on it. Through this, I
can learn different things such as communicating with other people, compliance with
different relevant rules and regulatory requirements, most of all, operating a business.
IF YOU WERE A CREDITOR OF A JURIDICAL PERSONALITY DEBTOR, NOT

TECHNICALLY INSOLVENT, WHAT WOULD YOU FILE AGAINST THE JURIDICAL
PERSONALITY?
If I were a creditor, I would file rehabilitation for debt restructuring with court
supervision because I would like to consider other matters other than my own welfare.
Along with this, I can help the owner to preserve the business as a going concern, most
especially the workers that is working on that company. They have their own family to
fed as well and I will not let myself to be a cause of hunger and hardship to them. This
rehabilitation will help minimize job losses resulting from a potential business closure.
The owner will benefit as well once the rehabilitation proceeding is approved, in a way
that this will allow the business to potentially recover and become profitable again.
In addition, the goal of this rehabilitation with court supervision is to recover a
greater portion of their debts compared to what they would receive in a liquidation
scenario. It will provide a structured approach to debt restructuring, ensuring fairness
and transparency between us, the creditor, and the debtor. The problem is it may be a
matter of waiting and luck because it can be time-consuming and expensive.

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DIFFERENCE BETWEEN FOUR JURIDICAL PERSONALITIES

Duties and Obligations of Person Comprising the Juridical Personality

As to the Form of Decision Making

IF YOU WILL ESTABLISH A BUSINESS, WHAT JURIDICAL PERSONALITY WILL

As a beginner and a person who lacks enough resources and experiences in

IF YOU WERE A CREDITOR OF A JURIDICAL PERSONALITY DEBTOR, NOT

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