PCCLOSEOUT

There are three general types of legal forms for business: a soie proprietorship, a partnership, or a corporation. A great majority ofbusinesses start as sole proprietorships. Forming this legal organization is fairly easy. Few requirements and licenses are needed. Sole proprietorship, although popular to first time business owners, is the most vulnerable to lawsuits. If you and your spouse hold any Torrens Title under your names, creditors could easily attach and levy that real estate to satisfy any judgment against you. Once personal liability is established, your exposure to collection may go beyond the investments you placed in a business enterprise.

Food Manufacturers and Processors
Manufacturers and processors of foodstuffs, drinks, toilet articles and similar goods shall be liable for death or injuries caused by any noxious or harmful substances used, although no contractual relation exists between them and the consumers. If the injurious condition of the article is traced to its origin, the immediate vendor is unaware of the manufacturer’s fault and he cannot be liable for the injuries the consumer may suffer. But if the noxious condition is not due to the manufacture of the article but to something that happened to it while it is in the hands of the vendor, like expiry, abandonment, or carelessness in its custody, the vendor becomes liable for his own negligence.

The simplest and oldest form of business is the sole proprietorship. When one person owns a business enterprise, any income from that business is considered his personal income and is fair game to creditors. People who are engaged in conducting business for themselves may be classified as sole proprietors. Look around every nook and cranny of Philippine urban and rural communities and you will notice the proliferation of sari-sari stores. A sole proprietorship is the easiest, least cumbersome business entity to create. There are minimum permits and licenses from the government. The sole proprietors, in general, own all or most of the business property and has exclusive responsibility for the management and control of the enterprise.
Many small businesses start as sole proprietorship’s. If you start a business on your own — without partners—you will be a sole proprietor. You might get by with a city business license, a resale license, and a “doing-business-as” or fictitious business statement ). If you use your own name, you may not need the DBA. But you may discover
that your business is sending you signals that another form would better suit your needs. In a sole proprietorship, legally and practically, the owner is the business, and any capital must come from the owner’s own resources, and those borrowed from financial institutions. The availability of limited alternatives for raising financial capital is perhaps the greatest disadvantage of the sole proprietorship . In reality, the biggest disadvantage of solo ownership is that you alone will shoulder liabilities. You are the shock absorber of lawsuits. Sole proprietorship is the simplest form of ownership. It is also the most risky. The owner pours in his own money into the business enterprise, reaps all the profits and shoulders all the risks and losses. Just like a general partner in a general partnership, the sole owner’s personal liability extends beyond his investment in the business entity. Creditors could reach his personal assets in case of a lawsuit. The sole owner is practically defenseless against legal attacks.

The suppliers of durable or non-durable consumer products are jointly liable for imperfections in quality that render the products unfit or improper for consumption and those resulting from inconsistency with the information provided on the container, packaging, labels or advertisement as well as for imperfections in the quantity of the product when their net content is less than that indicated in the container.

Directors, Trustees and Officers of Corporations
Directors, trustees, and officers of corporations who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty shall be jointly and severally held liable for all damages suffered by the corporation, its stockholders, members and other persons . Directors of corporations are required to act in utmost good faith .

Any foreign manufacturer or importer will be liable for redress, independently of fault, for damages caused to consumers by defects resulting from design, manufacturing, construction, assembly and erection, formulas and handling and making up, presentation or packing of their products, as well as for the insufficient or inadequate information on the use and hazards of those products.

Sellers of Defective Products
The seller of defective products is also liable when it is not possible to identify the manufacturer, builder, producer or importer, or when the product is supplied without clear identification of the manufacturer, producer, builder or importer, or he does not adequately preserve perishable goods .