EXECUTIVE SUMMARY

Highlights

A. Project Background

TheCasa Felice Boarding House comes from the Italian word

“casa” and “felice” which means happy home.

B. Marketing Feasibility

The Casa Felice will be disseminated through social media,

tarpaulins, newspapers, flyers and posters.

Our Boarding House target market are college students of La

Trinidad, Benguet.

C. Management and Personal Feasibility

Casa Felice’s boarding house will operate as a general

partnership. Hence all partners have equal right, entitled to

participate in the operation of the business and have equal

share in the profit & losses during the operation of the

business.

D. Production of Technical Feasibility

 Casa Felice’s boarding house will acquire furniture &

fixture to be used in its business operations in order to

provide excellent services to its tenants.

E. Financing & Financial Feasibility

In order to sort its production, Casa Felice boarding house

will require a total project cost of Php. OO that could cover

the expenses for business processing, licensing, interior

design, furniture & fixture and other equipment. The source of

the financing will be from the savings of the proponents. The

proposed business will generate a net loss of Php. 00 for the

year and a net income of Php.00 for the following year.

F. Socio-Economic Feasibility

Casa Felice’s boarding house will be socially responsible

as a business. Hence, our business is eco-friendly, it shall

dispose its waste materials in the proper disposal area to save

mother earth.
 CHAPTER 1

Project Background

Background of the Study

A feasibility study is an important business development

process. The feasibility study is undertaken to determine the

viability of the opening of the proposed business which is “Casa

Felice Boarding House”.

The municipality of La Trinidad, Benguet known as a

populated place wherein most of the people want to live in for

them to find jobs and to study, thusthe need for boarding house.

We make this proposal for the purpose of helping the

college students studying here in La Trinidad, Benguet to have a

boarding house at an affordable price, good ambiance, and

dependable security. It can be a place to stay comfortably with

good surroundings and beautiful scenery.

Table 1: Project Proponents

Name Nationality Address % of Ownership

Abad, Raven Filipino Bauko, Mt. 14.28%

Kate Province

Balicao, Jenny Filipino Buguias, 14.28%

Benguet

Benito, Clofe Filipino La, Trinidad 14.28%

Bugnay, Britney Filipino Kabayan, 14.28%

Fee Benguet

Emperador, Filipino Rosario, La 14.28%

Nicholle Faith Union

Nacyom, Alma Filipino Kibungan, 14.28%

Christy Benguet

Vicente, Jasper Filipino Buguias, 14.28%

Benguet
 CHAPTER 2

Marketing Aspect

General Market Description

Marketing is the process of continuously and profitably

satisfying target customer’s needs, wants, and expectation more

seriously than competition. (Marketing Mix, Josiah Go). Needs

are the basic reason or minimum requirements consumer look in a

product or service. They are called the qualifying or “gate

keeper” dimensions in a purchase. Wants are the determining

dimensions among many choices. In addition, expectations are

actually part of “wants” but they become extremely important

when products or services are not differentiated.

Marketing is interfacing of the company and its target

market. A marketer should always consider the strength and

weaknesses of his company in serving the needs and wants of his

market. He must therefore choose the market segment where he can

have a leadership or potential leadership role.

Target Market

The proposed project will be targeting students who will

be staying around La Trinidad at any givenlength of time. It

will be located in Bayabas, Pico, La Trinidad and it will

provide quick access to the different schools. The boarding

house will be accommodating both females and males students as

its tenants.
Table 2: Number of students 2018-2019

Population of students among schools in La Trinidad

Name of the School Population

Kings College of the 2,762

Philippines

Cordillera Career Development 2,299

College

Benguet State University 7,772

Total 12,833

Table 2 shows the actual population of students for the school

year 2018-2019 in the different schools in La Trinidad.

Demand

The demand for the service of Casa Felice Boarding House is

estimated using the following:

The proponents distributed survey questionnaires to the

college students of different schools of La Trinidad to know the

percentage of who will be willing to accommodate the boarding

house. Three hundred thirty six survey questionnaires were

distributed and all were retrieved.

 In order for the sample size to be determined which will

represent the proponents,we used the formula by Sloven’s

(1960),n= 𝑁/(1 + 𝑁𝑒 2 ); where n isthe sample size, N is the actual

populations of the students in La Trinidad, and e is the margin

of error which is set to be 5% to be precise, the computation of

the sample size is as follows:

Given:

N = 12,833

e = 5%

n = ?

Solution:

𝑁
n= 1+𝑁𝑒 2

12,833
= 1+12,833(.05)2

=336.98 or 337

The percentage and that sample have been computed using the

following formula:

𝑖𝑛𝑑𝑖𝑣𝑖𝑑𝑢𝑎𝑙 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛
%= 𝑡𝑜𝑡𝑎𝑙 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛

Sample size= sample size x %

Shown in the table 3, is the sample size distribution. The

population data for the college students of different schools

were provided by the research of the proponents.

Table 3: Sample Size Distribution

Name of the Population Percentage Sample

School

Kings College 2,762 21.52% 73

of the

Philippines

Cordillera 2,299 17.91% 60

Career

Development

College

Benguet State 7,772 60.56% 203

University

Total 12,833 100% 336

QUESTIONNAIRE:
The questions were asked as following:

1. Are you a resident of La Trinidad, Benguet?

The question aims to determine whether the college students

of La Trinidad is residing in La Trinidad, Benguet. This will

give an idea to the proponents on how many students are non-

resident that will give the possibility of a greater demand on a

proposed project.

Table 4

Survey Choice Frequency Percentage

Yes 138 41%

No 198 59%

As shown in the table above, 45% of the respondent are

resident of La Trinidad while 55% of the respondent are non-

resident of La Trinidad, Benguet.

2. What type of accommodation are you living in?

The question aims to determine if most are living in a

renting establishment by its respondent’s students in La

Trinidad. This will give idea to the proponents to see if they

have a sufficient tenants if they were be able to build their

renting establishment.

Table 5

Survey Choice Frequency Percentage

Family House 97 29%

Relative’s House 44 13%

Boarding House 195 58%

According to the table above, boarding house is the most

type of accommodation among the 336 respondents, with the

highest percentage of 58%, followed by family house with a 29%

and the relative house of 13%.

3. What are the problems you usually encountered in the place

you are staying?

The question determine the problems usually encountered in

the place where the respondents are staying in. This will help

the proponents to address the customer’s problem and to improve

services.

Table 6

Survey Choice Frequency Percentage

Limited Water 141 41.96%

 Supply

Distance from 38 11.30%

school

Noisy 46 13.70%

Environment

Safety 60 17.86%

High rental 51 15.18%

cost

Total 336 100%

4. If we are to put up a Boarding House at Pico, L.T.B, are you

willing to accommodate?

The third question will determine if the respondents are

willing to move up if they are given the chance. This will give

an idea if the proposed project will be accommodated immediately

if the project has been through.

Table 7

Survey Choice Frequency Percentage

Yes 234 69.64%

No 102 30.36%

Total 336 100%

5. Which do you prefer?

A. Pricing

The question aims to see if what pricing the students wants

if they are to accommodate the said boarding house. This will

help the proponents to decide on how much pricing they must

pursue.

Table 8

Survey Choice Frequency Percentage

P1500 (Bed Space) 19 8.12%

P2000 (Solo Room, 42 17.95%

Common CR & kitchen)

P2500 (Solo Room, 35 14.96%

Common CR & Kitchen

with City

Services/Bills)

P3000 (Solo Room, 105 44.87%

Own CR & Kitchen,

Own Sub-meter)

P4000 (2 rooms, Own 33 14.10%

CR & Kitchen, Own

Sub-meter)

Total 234 100%

As the table shows 45% has the highest price rate which is

the P3000 (solo room, own kitchen & C.R with own sub-meter).

Second is the P2000 (solo room, common CR & kitchen except city

services) with the percentage of 17.95%.Third is the P2500 (solo

room, common C.R. & kitchen with only city services) with

14.96%, followed by the P4000 (2 rooms, own C.R. & kitchen with

own sub-meter) having 14.10% in rate. Lastly is the P1, 500 (bed

space except city services) having 8.12% of rate.

B. Housemates

The questions aims to determine what co-tenants do they

like. This will help the proponents to determine who shall be

their tenants be.

Table 9

Survey Choice Frequency Percentage

All men 25 10.68%

All Women 90 38.46%

Mixed Men & Women 119 50.85%

Total 234 100%

C. Security

The question aims to determine if the tenants wants

security. This will help the proponents to know if they need to

put up CCTV if able they are to up their boarding house.

Table 10

Survey Choice Frequency Percentage

With CCTV 177 75.64%

Without CCTV 57 24.36%

D. Terms of Payment

The question aims to determine on what payment basis the

students mostly prefer. This will help the proponents to decide

on when they must charge the payment.

Table 11

Survey Choice Frequency Percentage

1 Month Deposit, 1 197 84.19%

Month Advance

2 Months Deposit 37 15.81%

 E. Water Services

Table 12:

Survey Choice Frequency Percentage

Water District 209 89.32%

Water Delivery 25 10.68%

F. Number of tenants per room

Table 13

Survey Choice Frequency Percentage

1-2 person 159 67.95%

3 person 75 32.05%

5. Current Estimated Monthly Expenses

Table 14

Survey P1-P50 P51-P150 P151-P300 Specify

Choice Frequen % Frequen % Frequen % Frequenc %

 cy cy cy y

Water 59 25.21 110 47% 41 17.52 24 10.26%

% %

Electri 48 20.51 96 41.03 63 26.92 27 11.54%

city % % %

6. Suggestions:

 Far away from the canals or rivers.

 Near the road and market places

 Good and perfect destination of house

 Parking area, balcony to hang clothes

 Internet available, near food establishments, laundry and

quiet

 Quiet neighborhood, No children

 A well-furnished room for a student, with bookshelf and a

table with cabinets for school needs.

Demand Analysis

Demand is the willingness of people or consumers to avail a

product at a certain price. This is used to know if a

certain product or services will be accepted by customers.

Demand is very important in introducing new product or

 services, since if the demand of a certain commodity or

service is low, it is unfavorable situation for the

business. No business enterprises or firms will continue to

operate, or will start to operate in the absence of

customers to patronize their services or products offered.

As to the result of the the questionnaires that the

proponents floated there is 69.64% who are willing to

accommodate it as shown in table 7.

ANALYSIS OF SUPPLY

Supply, as the counter part of demand, is the quality of

services that will be offered at a given price of a certain

market and a particular time. It is as an important factor in

this study because this will be needed in determining the market

of products as well as the price. Though the proposed project

has direct competitor in the projected site, it will be offering

affordable prices.

Presently, the proposed business competitors are many but

as to what we observed they are in need of said establishment

and there service is not that quality to give customer

satisfaction.
SYSTEMS AND FORMS DESIGN:

Table 15: SWOT Identification

Internal Strength Internal Weaknesses

1. Affordable Price 1. Processing of business

permits is hard and takes time

2. Accessible to students 2. Requires large capital to

because it is situated along start the business.

the highway.

3. Provide quick access to the 3. There is no employee

different schools

Demand-Supply Analysis

With the foregoing analysis, supply is lesser than demand.

Thus, there is a real need of establishing a new boarding house

in La Trinidad to meet the demand.

PROPOSED MARKETING PROGRAM

Marketing is the interfacing of the company and its target

market. A marketer should always consider the strengths and

weaknesses of his company in servicing the needs and wants of

the market. The overriding objective of the company is to

satisfy its customers better than its competitors; otherwise,

his competitors will end up satisfying his customer better than

himself. Therefore, the company will adopt a marketing program

to encourage the customers to avail of the product of the

product and services offered by the company.

A. Pricing Strategy

The proponents, in setting up the rental price of every

room and bed spaces, will take into consideration its proposed

consumers and the existing competitor’s prices. With this, the

proponents have adopted the existing competitor’s prices as a

benchmark for the first year of operation for the reason that it

is based on the legal pricing laws promulgated by the Department

of Trade & Industry and the other concerned government agencies.

For the succeeding years, the business will be increasing its

prices to combat inflation and also to cover the operating

expenses of the company.

B. Promotional Strategy

For the people to know that the company exists, it needs to

be advertised. Advertising is a way of informing customers about

the company’s services, as well as persuading them to avail of

it. The company will be using social media, tarpaulins, and

posters to inform its target market.

 MANAGEMENT ASPECT

NAME OF THE BUSINESS

The name of the business is Casa Felice’s boarding house.

The idea of the name Casa Felice came from the Italian word

“casa” and “felice” which means home and happy where in it will

offer a comfortable place to stay with.

COMPANY LOGO

Our company logo was made as we all partners decide its design

on how it looks like. In our logo the roof represents the

business that we established and its color blue represent that

there is peace and calmness. The green eyes represents the

mountains that surrounds, and the color red as a mouth

represents love. We came up to this color which signifies our

passion, hardworking, love, and care towards our costumer.

Company Vision and Mission:

VISION

Casa Felice envisions itself to be a leading serviced

residence in La Trinidad and the region, committed to providing

impeccable hospitality for our guests.

Objectives:

In the pursuit of its vision and mission, Casa Felice endeavors

to:

1. Provide a memorable local experience in a happy home away

from home.

2. Ensure the safety of those staying in its boarding house.

3. In view of the advantages of partnership mentioned above,

the proponents believe that general partnership is very

much suited for the proposed project.

MISSION

Casa Felice aims:

1. To welcome and delight our guests by providing a memorable

local experience in a happy home away from home; and

2. To provide secure and comfortable communities designed to

contribute to the personal and academic growth of each

residential student.

FORM OF ORGANIZATION

The proponents have chosen general partnership as the

form of organization in this proposed project because in

this form of ownership, certain advantages will be useful

for the business. This advantage is very beneficial to the

proposed project because it needs the combined potentials

of the partners. Another is the ability to obtain capital

in which the combined financial of the partners stand

behind the negotiation for business capital. Thus, the

partners have an obligation to give what they have promised

to contribute to the business in order that it will have

something to use in its operations. Aside from that, the

intimate relationships of the partners also provide a

strong support to capital acquisition. Also, in the kind of

ownership, there is a limited regulation or restriction by

the government. It is the nature of partnership that the

business income is not taxed, and that there is a minimum

amount of restriction by the government. Another is that

the partnership is known to be simple in its concept, as

compared to corporate form. Lastly, there is a presence of

equality whereby each employee can be recognized of his/her

performance to the business, thus motivating him to work

more for the business.

Some advantages considered in establishing a partnership

are:

1. Ease of organization;

2. To collaborate the wider pool of talents, judgements,

evaluations and knowledge and skill of the partners will be

merge and to provide and creating brain storming for the

success.

3. More capital available for the firm the ability to raise

fund may increase both because two or more partners may be

able to contribute more fund and because their borrowing

capacity may be greater.

4. Maximization of personal interest of the proponents to

the success of the firm.

5. Definite legal status of the company.

6. Pass through profits and taxation because individual

forms of partnership they are tax just like sole

proprietorship. Each includes his/her business income on

his/her personal tax return.

 ORGANIZATIONAL CHART

General Manager
Benito, Clofe

Assistant Gneral
Manager
Emperador, Nicholle Faith

Production
Financial Manager
Manager
Abad, Raven Kate Vicente, Jasper

Bugnay, Britney Balicao, Jenny

Nacyom, Alma Christy

Company Policy

A. General Policies

I. General Behavior

The TENANT-LESSEE is expected to practice proper

behavior, and to respect the rights of other tenants. The

tenants shall avoid creating too much noise, loitering,

wall vandalism, and other activities which might disrupt

and create disturbance to other tenants and endanger the

lives staying within the building premises. Smoking and

drugs are strictly prohibited.

II. Provision on Visitors

Visitors of the tenants are not allowed to enter the

building premises from 9:00pm onwards. The visitors must

comply with the restrictions as set out by this code for

tenants.

Overnight visitors are allowed only upon the approval

by the management through the caretaker.

 III. Punishments

Punishments for tenants’ conduct which the management

deems as improper shall range from warnings to ejections of

the tenants depending on the offense and effects of such.

JOB DESCRIPTION AND REQUIREMENTS

General Manager

Job Specification

1. Must be a graduate of any business related course.

2.Diligent, hardworking and good in decision making.

3.Have the ability to deal and communicate with other people.

4.Have the ability to think of ways on how to develop and expand

business.

5.Has considerable knowledge on handling and managing people.

Job Description

1. In charge for the overall operation of the business.

2. Plans and implements the management policies of the firm.
3. Execute authority necessary to achieve the goals of the
business.
4. One who has control over a business and direct or overseas
the affairs.
5. Must have the organizational skills and leadership
qualities integral to partner’s success.
 6. Scheduled and presides all the meetings of the business.

Financial Manager

Job Specification:

1. Preferably CPA or graduate of Bachelor of Science in

Accountancy.
2. Good numeric and financial awareness.
3. With a strong financial accounting experience in managerial
roles.
4. Has the ability to write reports and business
correspondence.

Job Descriptions:

1. Provide financial reports and interpret financial

information to managerial staff while recommending further
courses of action.
2. Maintain the financial health of the organization.
3. Analyze costs, pricing, variable contributions, sales
results and the company’s actual performance compared to
the business plans.
4. Manage the preparation of the company’s budget.
 TECHNICAL ASPECTS

Introduction:

A business, before it has to be established, needs to

undergo through many processes. The owners must have and

intensive planning on the products or services they will be

offering to the customers, tools or equipment that they will

use, the location of the business, the building or the

facilities that it has to be put up, the sources of financing

the business and the documents of forms that they will be using

in the business. All of these things must be carefully defines

and studies because this will be the overall framework of the

business.

In this aspect, the proponents have thoroughly discussed

and enumerated the things necessary to establish the business.

Site Development Plan
Furniture and Fixtures

a. Table – an item with a flat surface that is designed to be

used for a particular surface.

b. Wooden Chair- a seat with a back on which one person sits,

typically having four legs and often having arms.

c. Bunk Bed-a piece of furniture consisting of two beds, one

above the other.

Table 16: Summary of Furniture and Fixture

Quantity Unit Cost Total cost

Table 24

Wooden 24 P2,494 P59,856

Chair

Double Bed 24 P7,999 P191,976

Office Supplies

a. Official Receipt- is issued by the seller to the buyer as

written evidence on sale of services or leasing of properties,

as well as acknowledgement on collection of cash payment on

services rendered.

b. Calculator- something used for making mathematical

calculations, in particular a small electronic device with a
keyboard and a visual display.
c. Ballpen- is a pen that dispenses ink over a metal ball at its
point. The metal commonly used is steel, brass, or tungsten
carbide.

d. Marker- a type of pen that makes a thick line

e. Bond Paper- high-quality writing paper.

f. Printer

Table 17: Summary of Office Supplies

Quantity Unit Cost Total Cost

Official 5

Receipt

Calculator 1

Ballpen 1 pack

Marker 1 pack

Bond Paper 1 Rem

 Printer

Other Equipment

a. Fire Extinguisher- an active fire protection device used to

extinguish or control a fire, often in emergency situation.

Fire Extinguisher

Cleaning Materials (Stick Broom, Dust Pan, Mop, Broom)–

materials that used to remove dirt, including dust, bad smells

and clutter on surfaces.

 Floor map Soft Broom Dust Pan
CLEANING MATERIALS

Door MatFeather Floor map

Duster Soft Broom Dust Pan
Squeegee Stick Broom
c. Jetmatic Pump- a mechanical device that moves fluid by

pressure or suction.

e Rags Hand Feather

BrushDuster Squeegee Stick Broom Scourging Pad
Garbage Bin

d. Extension Wire –lead is a length of flexible electrical power

cable (flex) with a plug on one end and one or more sockets on the

other end (usually of the same type as the plug).

Spray Bottle Hand Brush Garbage Bin Scourging Pad
Gloves Air Freshener Diswashing Liquid Garbage Bags

Dishwashing Gloves Air Freshener Diswashing Liquid Garbage Bags

ctant
 Bond Paper Ink

e. Computer- is a machine for manipulating data according to a

LS
list of instructions.

le Destop Computer Printe

f. Surveillance Camera (CCTV)– use to transmit a signal to a

T specific place, on a limited set of monitors.
Table 17: Summary of Other Equipment

Quantity Unit Cost Total Cost

Fire 4 P1,000 P4,000

Extinguisher

Jetmatic Pump 1 P25,000 P25,000

Cleaning

Materials 4 P25 P100

 Stick 4

Broom 4 P230 P920

 Broom 4 P206 P824

 Dust Pan

 Mop

Computer Set 1 P57,291 P57,291

Surveillance 9 P1,430 P12,870

Camera (CCTV)

Plant Location

The proposed project will be situated at Bayabas, Pico, La

Trinidad, Benguet. The location has also its neighboring

establishments. It is along the highway, and can be reached by

riding a jeepney or any public transportation vehicle.

Building Lay-out
First Floor Plan
Second Floor- Fourth Floor Plan
Project Activity

The proposed business will not come to its existence

without the major activities. These activities will show the

time frame from the time the business is planned up to the time

it is already completed. Thus, this will be a guide for the

owner of the business. The time frame presented should be

followed in order that the target completion of the project will

be reached.

Here are the major activities:

Table 18: Major Activities

Activities No. of Months Allotted

General Project Planning 2

Obtaining of Financing 2

Land Acquisition 1

Building Construction 3

Furnishing of Building 2

Selection of Supplies and Furniture 1

Arrival of Supplies and Furniture 1

Start of Normal Operation

Purposes of Scheduling the Activities

 To determine the probable dates when the construction

materials should be made available in order to

complete the scheduled phase of construction work.

 To determine the activities that should be done

immediately in order to start the normal operations

within the time frame of in advance.

 To determine the activities that requires a higher

amount of money and to make the amount readily

available.

 To lessen the problems that the proponents will

encounter in establishing the proposed business.

 To make the process of establishing the proposed

business run smoothly.

Description:

1. General Project Planning

The proposed project should undergo a feasibility study to

make sure if such project will be successful and viable in the

future or not and if the project will be crucial to the

proponents and to the prospective customers and suppliers.

2. Obtaining of Financing

The funds needed for the business will be provided by the

partners. The partners will agree on what will be the amount

they should contribute for the business. If the fund is

inadequate for the business, loans from banks and other lending

institutions can be obtained.

3. Securing Permits on Government Agencies

The business should be put up in accordance to the

requirement set by the government agencies. Such requirements

should be processed by the owners of the business in order to

make the business’ existence legal. The requirements are

business permits, building permit, DTI application, BIR

registration and the registration and approval of SEC.

4. Land Acquisition

This includes acquiring the land.

5. Building construction

This includes the start of construction of the building

through the carpenters that the contractor paid to render their

services.
6. Furnishing of the building

The building premises shall be fully furnished by the

construction firm.

7. Selection of Supplies, Furniture and Equipment

The owners of the business will be acquiring the supplies,

furniture and equipment needed to a wholesaler of such in order

to lessen the prices and to avail of bulk discounts.

8. Arrival of Supplies, Furniture and Equipment

The seller of the things mentioned above will be

delivering those things to the vicinity. The supplies, furniture

and equipment should be in accordance with the set description

and sample provided by the seller.

9. Commencement

The firm shall start its operation after the preceding

activities has been completed.

This table presented on the next page is the Gantt chart which

shows the activities as well as the duration of each activity.

Utilities:

A. Water Supply

The source of water supply for the company’s use will be

coming from deep well using electric jetmatic pump to lessen

expense.

B. Power Supply

The Benguet Electric Cooperative (BENECO) will be supplying

the electricity needs of the company.

 FINANCIAL ASPECT

Introduction

Owning a running business is an appealing option for

entrepreneur-minded individuals. The attraction of increased

flexibility and control must be countered with a realistic

appreciation of the financial aspects and responsibilities that

come with running a business. Proper planning is paramount at

all stages, as is persistence and knowing the available

resources for both guidance and funding.

A financial feasibility study is an assessment of the

financial aspects of a business. The study considers how much

cash is needed, where it will come from, and how it will spent.

It also projects the return on investment and other financial

aspects. To determine whether the future industry will remain

profitable through the existence of competitors and

unfavorable economic condition, the researchers have to project

a six year financial statement including the pre-operating year.

TOTAL PROJECT COST:

Land P2,400,000

Building 6,120,000

Furniture & fixtures 251,832

Equipment 72,291

Total Non-current Asset P8,844,123

Add: Pre-operating Expenses:

Building permit, plan & occupancy 40,000

Advertising expense 2,000

Repair & maintenance 5,000

Utilities expense 48,500

Interest expense 185,000

Other expenses 75,377 355,877

Total Project Cost 9, 200,000

INITIAL CAPITAL REQUIREMENTS

The partner agreed to contribute an equal sharing of

capital in amount of P1,050,000 each.

Partners Invested amount

A P,1050,000

B P,1050,000

C P,1050,000

D P,1050,000

E P,1050,000

F P,1050,000

G P,1050,000

TOTAL P,1050,000
 Since the partners can’t provide the necessary

capitalization

they have to get additional capitalization through bank loan

an amount of P1,800,000 in Summit Bank payable in 5 years with

an interest rate of 10% per annum.

MAJOR ASSUMPTIONS

Major assumptions are included at the process of computing

financial projections. They serve as the foundation for

estimating the future expenditures and revenues of the project

as accurately as possible.

The building has 23 units to be rented out at a price of

P3,500 per unit/month. The rent income increases 10% per annum.

The building will have a useful life of 30 years with 600,000

residual value. The equipment will have a useful life of 6

years with 6,500 residual value for computer set and 3,000 for

jet pump, and 30 years useful life for furniture and fixture
with 25,000 residual value. Depreciation expense will be

computed using straight line method of depreciation. Other

income will derived from the cash in bank’s interest with 1%

interest per year. Utilities expense will increase by 4% per

year. Repair and Maintenance is at 5,000 pre-operating year and

increases by 7% for the first year of operation and increases

by P5,000 per year. Partner’s profit a loss sharing ratio will

be based on initial investment, thus their profit and loss ratio

will be 14.29%. Partner’s total drawings will be 5% of their

previous year’s capital and no drawings will be made on the

first year of operation.

FINANCIAL RATIOS

Financial Ratios compare the results in different line

items of the financial statements. The analysis of this ratios

is designed to draw conclusions regarding the financial

performance, liquidity, solvency and asset usage of a business.

I. Profitability Ratios

 Profitability ratios are set of measurement used to

determine the ability of business to create earnings.

A. Return on Asset
  To measure the overall efficiency of the business in

managing assets and generating profit, the rate of

return on total assets is computed using the formula:

*Return on Asset= Net Income-Total Assets

Year 2020 2021 2022 2023 2024

Net Income 529,560 662,052 789,694 922,386 1,051,028

Divided by: 9,802,698 9,705,617 9,722,804 9,853,601 10,087,699

Total

Assets

Return on 5.40% 6.82% 8.12% 9.37% 10.42%

Assets

B. Return on Stockholder’s Equity

 Measures the percentage of income derived for every

peso of owner’s equity, the rate of return on

Stockholder’s Equity is computed using the formula:

*Return on Stockholder’s Equity = Net Income/Total

Stockholder’s Equity

Year 2020 2021 2022 2023 2024

Net 529,560 662,052 789,694 922,386 1,051,028

Income
Divided 7,879,718 8,147,979 8,530,508 9,026,647 9,626,659

by:

Equity

Return on 6.72% 8.13% 9.26% 10.22% 10.92%

Equity

II. Liquidity Ratio

Liquidity ratios are financial ratios that measures a

company’s ability to repay both short and long-term obligations.

A. Current Ratios

 To test the liquidity of the business to meet the

current obligations from its current asset, the

current ratio is computed using the following formula:

*Current Ratio = Current Asset/Current Liabilities

 To compute current ratios in the following tables,

implies that the business is able to pay the currently

maturing liabilities from its current assets.

Year 2019 2020 2021 2022 2023 2024

Current 404,377 1,058,0 1,060,4 1,177,0 1,407,3 1,740,8

assets 35 14 61 18 76

Divided 48,500 442,980 447,638 452,296 456,954 461,612

by:

Current

Liability

Current 8.38 2.39 2.37 2.6 3.08 3.77

Ratio

B. Net Working Capital

 Determine if a company can meet its current

obligations with current assets and how much excess a

deficiency there is, the net working capital computed

using the following formula:

*Net Working Capital = Currents assets-Current Liabilities

Year 2019 2020 2021 2022 2023 2024

Current 404,377 1,058,035 1,060,414 1,177,061 1,407,318 1,740,876

Assets

Less: 48,500 442,980 447,638 452,296 456,954 461,612

Current

Liability
Net 355,877 615,980 612,776 724,765 950,364 1,279,264

Working

Capital

III. Solvency Ratio

 It measures the amount of capital that comes debt. In

other words, solvency financial ratios are used to

evaluate company’s debt level.

A. Debt Ratio

 Measures the portion of company assets that is

financed by debt, the debt ratio is computed using the

following formula:

*Debt Ratio = Total Liabilities/Total Asset

Year 2019 2020 2021 2022 2023 2024

Total 1,898,5 1,922,9 1,577,6 1,192,2 826,954 461,040

Liabiliti 00 80 38 96

es

Divided 9,248,5 9,802,9 9,705,6 9,722,8 9,853,6 10,0876

by: 00 80 17 04 01 99

Total

Assets
Debt 20.53% 19.62% 16.05% 12.26% 8.39% 4.57%

Ratio

B. Equity Ratio

 Determines the portion of total assets provided by

equity (ex. Owner’s contributions and the company’s

accumulated profits) the equity ratio is computed

using the following formula:

*Equity Ratio = Total Equity/Total Assets

Year 2019 2020 2021 2022 2023 2024

Total 7,350,0 7,879,7 8,147,9 8,530,5 9,026, 9,626,65

Equity 0 18 79 08 647 9

Divide 9,248,5 9,802,6 9,705,6 9,722,8 9,853,60 10,087,6

by: 00 98 17 04 1 99

Total

Assets

Equity 79.47% 80.38% 83.95% 87.74% 91.61% 95.43%

Ratio

C. Debt-Equity Ratio

 Evaluates the capital structure of a company. A debt

equity of more than 1 implies that the company is

Projected Statement of Changes in Owner’s Equity for the Ended December
31, 2019-2024

solvent firm, less than 1 implies that is a

conservative one. The debt-equity ratio is computed

using the following formula:

*Debt –Equity Ratio = Total liability/Total Equity

Year 2019 2020 2021 2022 2023 2024

Total 1,898,5 1,922,9 1,577,6 1,192,2 461,040

Liability 00 80 38 96 826,954

Divide by: 7,850,0 7,879,7 8,147,9 8,530,5 9,026,6 9,626,65

Total 00 18 79 08 47 9

Equity

Debt- 24.40% 19.12% 13.98% 9.16% 4.79%

Equity 25.83%

Ratio
 2019 A B C D E F G
Beginning 1,050,0 1,050,0 1,050, 1,050, 1,050,0 1,050,0 1,050,0
Balance 00 00 000 000 00 00 00
Less: - - - - - - -
Drawings
Balance 1,050,0 1,050,0 1,050, 1,050, 1,050,0 1,050,0 1,050,0
00 00 000 000 00 00 00
Add: Share - - - - - - -
in Net
Income
Ending 1,050,0 1,050,0 1,050, 1,050, 1,050,0 1,050,0 1,050,0
Balance 00 00 000 000 00 00 00
TOTAL 7,350,0 7,350,0 7,350, 7,350, 7,350,0 7,350,0 7,350,0
00 00 000 000 00 00 00

2020
Beginning 1,050,0 1,050,0 1,050, 1,050, 1,050,0 1,050,0 1,050,0
Balance 00 00 000 000 00 00 00
Less: - - - - - - -
Drawings
Balance 1,050,0 1,050,0 1,050, 1,050, 1,050,0 1,050,0 1,050,0
00 00 000 000 00 00 00
Add: Share 75,67 75,67 75,67 75,67 75,67 75,67 75,67
in Net 4 4 4 4 4 4 4
Income
Ending 1,125,6 1,125,6 1,125, 1,125, 1,125,6 1,125,6 1,125,6
Balance 74 74 674 674 74 74 74
TOTAL 7,879,7 7,879,7 7,879, 7,879, 7,879,7 7,879,7 7,879,7
18 18 718 718 18 18 18

2021
Beginning 1,125,6 1,125,6 1,125, 1,125, 1,125,6 1,125,6 1,125,6
Balance 74 74 674 674 74 74 74
Less: 56,28 56,28 56,28 56,28 56,28 56,28 56,28
Drawings 4 4 4 4 4 4 4
Balance 1,069,3 1,069,3 1,069, 1,069, 1,069,3 1,069,3 1,069,3
90 90 390 390 90 90 90
Add: Share 94,60 94,60 94,60 94,60 94,60 94,60 94,60
in Net 7 7 7 7 7 7 7
Income
Ending 1,163,9 1,163,9 1,163, 1,163, 1,163,9 1,163,9 1,163,9
Balance 97 97 997 997 97 97 97
TOTAL 8,147,9 8,147,9 8,147, 8,147, 8,147,9 8,147,9 8,147,9
79 79 979 979 79 79 79
 2022
Beginning 1,163,9 1,163,9 1,163, 1,163, 1,163,9 1,163,9 1,163,9
Balance 97 97 997 997 97 97 97
Less: 58,20 58,20 58,20 58,20 58,20 58,20 58,20
Drawings 0 0 0 0 0 0 0
Balance 1,105,7 1,105,7 1,105, 1,105, 1,105,7 1,105,7 1,105,7
97 97 797 797 97 97 97
Add: Share 1,112,8 1,112,8 1,112, 1,112, 1,112,8 1,112,8 1,112,8
in Net 47 47 847 847 47 47 47
Income
Ending 1,218,6 1,218,6 1,218, 1,218, 1,218,6 1,218,6 1,218,6
Balance 44 44 644 644 44 44 44
TOTAL 8,530,5 8,530,5 8,530, 8,530, 8,530,5 8,530,5 8,530,5
08 08 508 508 08 08 08

2023
Beginning 1,218,6 1,218,6 1,218, 1,218, 1,218,6 1,218,6 1,218,6
Balance 44 44 644 644 44 44 44
Less: 60,93 60,93 60,93 60,93 60,93 60,93 60,93
Drawings 2 2 2 2 2 2 2
Balance 1,157,7 1,157,7 1,157, 1,157, 1,157,7 1,157,7 1,157,7
12 12 712 712 12 12 12
Add: Share 131,809 131,809 131,80 131,80 131,809 131,809 131,809
in Net 9 9
Income
Ending 1,289,5 1,289,5 1,289, 1,289, 1,289,5 1,289,5 1,289,5
Balance 21 21 521 521 21 21 21
TOTAL 9,026,6 9,026,6 9,026, 9,026, 9,026,6 9,026,6 9,026,6
47 47 647 647 47 47 47

2024
Beginning 1,289,5 1,289,5 1,289, 1,289, 1,289,5 1,289,5 1,289,5
Balance 21 21 521 521 21 21 21
Less: 64,47 64,47 64,47 64,47 64,47 64,47 64,47
Drawings 6 6 6 6 6 6 6
Balance 1,225,0 1,225,0 1,225, 1,225, 1,225,0 1,225,0 1,225,0
45 45 045 045 45 45 45
Add: Share 150,19 150,192 150,19 150,19 150,192 150,192 150,192
in Net 2 2
Income
Ending 1,375,2 1,375,2 1,375, 1,375, 1,375,2 1,375,2 1,375,2
Balance 37 37 237 237 37 37 37
TOTAL 9,626,6 9,626,6 9,626, 9,626, 9,626,6 9,626,6 9,626,6
59 59 659 659 59 59 59
 CHAPTER VI

SOCIO-ECONOMIC ASPECT

The Government

Good governance and good citizenry are factors that affect

the stability and prosperity of a country.

Graft and corruption is one contender in hindering the

development and prosperity of the country. The government has

continuing initiatives to come up with more responsive public

administration structures and processes are ongoing efforts to

address the ever pervasive problem of corruption. Corruption or

the misuse of public power for private profit inhibits growth

and development, distorts access to services for poor

communities, undermines public confidence in the governments

will and capacity to serve the public deters trade and

investments, reduces revenues, increase cost, and propagates

wasteful allocation and use of scarce resources. Various sectors

of the society are doing their best to combat corruption,

enhance government efficiency, effectiveness, and

accountability.

Tax is a contribution levied by the government on property,

individuals or transactions to race money for public purposes

and pay necessary expenses of the government. It is also mean by

which the sovereign state through its law-making body demands

from revenue in order to support its existence and carry out its

legitimate objectives. Without this contributions, the operation

of government will be paralyzed, for the reason that the tax is

the lifeblood of the government.

Casa Felice Boarding House would be of help to the

government by paying the right amount of taxes on time. The

municipality of La Trinidad will generate more revenue from

income taxes of the business employees as well as the income tax

of the business itself.

The Customers

Customers are the resource upon which the success of the

business depends thus making them the most important people for

any organization. They help provide revenue and certainty for

the business and they make it possible to achieve business aims.

Without customer businesses would not exist for organizations

are purposely created to fulfill the needs of the customers.

Considering the customers as the life of any businesses,

they deserve to be provided with quality products and quality

services.
 Casa Felice Boarding House shall provide services that are

quality with competitive and affordable prices. The customers

shall also be served in well-mannered and approachable way for

them to be satisfied.

The business also considered the accessibility of the venue

to transportation and its nearness to schools and center

business of La Trinidad to enable for the customer to be able to

maximize their time and fare for transportation.

The Competitors

A healthy competition shall be observed by the Casa Felice

Boarding House, unethical tactics just to beat other boarding

houses will not be adhered. The boarding house would also

provide its service at a competitive price so as not to

undermine its competitors.

The Public

As the business name “Casa Felice Boarding House” implies,

“Boarding House”, the business will provide service for the

customer to stay in with affordable prices. People in or even in

outside the community of La Trinidad would be encouraged to

acquire service from the boarding house. With insufficient

boarding houses in La Trinidad, they are encouraged to fill and

acquire its service.

The Environment

In line with the community of La Trinidad’s clean and green

program, Casa Felice Boarding House shall be concern to the

cleanliness of its perimeter.

The business shall adhere to the waste management program

of La Trinidad and shall segregate waste.

 Articles of the Partnership

Upon valuable consideration and mutual promises, the

persons named below as “partners” hereby contract and agree to

bound to the following as their general partnership agreement

(this “ agreement”) dated this date of _______, 2019 for Casa

Felice, a general partnership governed by the laws of the

Republic of the Philippines (here in after known as “the

partnership):

ARTICLE 1 DEFINITIONS

SECTION 1.1. The terms below are to have the following meaning

when used in this agreement:

a. “Additional Capital Contributions” are any and all

capital contributions made subsequent to or in excess of the

“initial capital contributions”.

b. “Agreement” shall mean this general partnership

agreement, as amended from time to time.

c. “Capital Account” shall mean the account established for

each partner on the books of the partnership, reflecting such

partner’s capital contributions, plus such partner’s share of

partnership profit, less such partner’s share of partnership

losses, and less distributions by the partnership to such

partner.
 d. “Ordinary business activities of the partnership” shall

mean the nor mal day-to-day business activities of the

partnership and exclude activities involving decisions that

could potentially have a substantial current or future impact

upon partnership assets, debts, in come or expenses.

e. “Partners” shall initially refer to Raven Kate S. Abad,

Jenny D. Balicao, Clofe M. Benito, Britney Fee G. Bugnay,

Nicholle Faith A. Emperador, Alma Christy A. Nacyom, Jasper V.

Vicente. This list of persons who are partners of the

partnership may, in the future, be amended in accordance with

the provisions of the agreement.

f. “Partnership interest” shall mean all of the partners

rights or possessed or accruing to a partner under this

agreement including but not limited to her capital account,

rights in the profits of the partnership, and voting rights but

not including any rights said partner may possess as a lender to

the partnership under any loan agreement entered into between

the partner and the partnership.

g. “Vote of the Partners” shall mean one based upon each

partner having one vote with each vote with each vote having

equal weight. Unless stated elsewhere in the agreement, a

majority vote of the partners is required for passage of any

matter before the partners for considerations.

 h. “Majority vote of the partnership” shall mean a block of

votes of the partners collectivity constituting more than fifty

percent of the eligible partner votes whether or not said votes

are actually cast.

i. “Super majority vote of the partners” shall mean block

of votes of the partners collectivity constituting more than

sixty percent of the eligible partner vote whether or not said

votes actually votes.

j. “Withdrawal compensation amount”/ “Removal compensation

amount” is defined herein as one hundred percent of the

withdrawing partner’s capital account.

ARTICLE 2PURPOSES/ PRELIMINARY INFORMATION

SECTION 2.1. Name of the partnership. The name of the

partnership shall be Casa Felice, a partnership organized under

the laws of the Republic of the Philippines here in after known

as “the partnership”. The partners may agree to change the name

in the future. The laws of the Republic of the Philippines shall

control the operation and interpretation of this agreement.

SECTION 2.2. Purpose of the partnership. The partnership shall

engage in the following business: sell books, school and office

supplies. The partnership may also engage in any activities that

are related, complimentary or incidental to this business

purpose.

SECTION 2.3. Duration. This partnership is an “at will”

partnership that does not have defined term.

SECTION 2.4. Principal place of business. The principal place of

the business of the partnership shall be in Bayabas, Pico, La

Trinidad, Benguet.

ARTICLE 3 THE PARTNERS

SECTION 3.1. The initial partners of the partnership and the

required initial capital contribution are as follows:

Partner Name Initial Capital Contribution

Raven Kate S. Abad Php 1,050,000

Jenny D. Balicao Php 1,050,000

Clofe M. Benito Php 1,050,000

Britney Fee G. Bugnay Php 1,050,000

Nicholle Faith A. Emperador Php 1,050,000

Alma Christy A. Nacyom Php 1,050,000

Jasper V. Vicente Php 1,050,000

SECTION 3.2 Admission of the new partners. Less prohibited

elsewhere in this agreement, additional partners may be ad

mitted upon a super majority vote of the partners. Admission of

the new partners shall not constitute an event of dissolution of

these partnership, furthermore, admission of any new partner

shall be contingent upon the prospective new partner agreeing

to, and executing, this partnership agreement as modified at

the time of admission.

SECTION 3.3 Actions by the partners; meetings; quorum.

a. The partners may take any actions requiring a vote of

the partners through a meeting in person, by proxy, or without a

meeting by written resolution in accordance with this section.

Meetings of partners may be conducted in person or by telephone

conference. To be effective, a partner resolution shall require

the signature and assent of the same percentage or number of

partners as that required had the action which is the subject of

the resolution been voted upon in the meeting of the partners.

b. A voting proxy given by a partner to another person must

be in writing. In no instance where action is authorized by

written resolution shall it be required that a meeting of

partners be called or prior notice of action to be given;

however, upon passage, a copy the resolution of the partners

shall be sent promptly to all partners and filed with the

partnership records.

c. Meetings of partners may be called by any partner, or

partners, individually or collectively holding a 25% or more

interest in the profits of partnership. When a meeting of the

partners has been called, seven (7) days advance written notice

shall be given to all partners. Notice of meeting called for

hereunder may be made by standard mail, electronic mail, or

facsimile transmission and shall contain the time, place, and

purpose of such meeting.

d. A quorum for any action to be taken at a meeting of

partners shall be present in person, via telephone, or by proxy

shall be partners collectively holding more than 60% of the

outstanding votes of the partnership. Any partner may through a

written instrument waive the right to receive prior notice of a

meeting of the partners as described herein.

SECTION 3.4. Access to books and records of the partnership.

Each partner shall have the right personally, or through

designation of an agent, to inspect and review the books and

records of the partnership during normal business hours. Upon

the written demand by a partner to inspect and review the books

and records, the partnership shall make said books and records

available for inspection and review within five (5) business

days of receipt of the written demand.

SECTION 3.6. Transaction of business with partnership. A partner

may transact other business with the partnership. If any partner

transacts business with the partnership, that partner shall have

the same rights and obligations with respect thereto as a person

who is not a partner. Any partner, who has a financial interest

involved in any transaction with the partnership, shall disclose

such financial interest to all partners by use of a written

report given to all partners, indicating all relevant facts of

such financial interest involved. A copy of such report shall be

maintained in the partnership records.

ARTICLE 4. MANAGEMENT OF PARTNERSHIP AFFAIRS

Section 4.1. Ordinary business activities of the partnership.

The partnership shall employ a general manager who shall be

responsible in the management of the ordinary business

activities of the partnership; all activities of the partnership

that are outside of the ordinary business activities of the

partnership shall be conducted only through a vote of the

partners and not through the action of a single partner acting

individually.

Section 4.2 Regardless of whether or not they shall be

considered outside the “ordinary Business Activities of the

Partnership”, the following activities of the partnership

shall be conducted only through a vote of the partners and not

through the action of a single partner acting individually:

 a. Incurrence of any expense in excess of Php 50, 00.00

b. Purchase of any asset or inventory with a value in

excess of Php 50,000.00

c. Entering in to any loan agreement or debt to or from the

partnership in excess of Php 50,000.00

d. Entering to any contract with monetary value in excess

of Php 50,000.00

Section 4.3 Matters requiring supermajority vote of partners.

The following activities of the partnership shall require an

affirmative supermajority vote of the partners prior to being

undertaking to the partnership:

a. Entering into a new line of business;

b. The sale of substantially all of the partnership’s

asset;

c. Admission of new partner; and

d. The decision to dissolve the partnership.

Section 4.4 Reimbursement for partnership expenses. Each shall

be entitled to reimbursement for the reasonable and necessary

expenses incurred by the partner on behalf of the partnership

in order to receive reimbursement, a partner must submit the

expense report to the other partner, and enter the expense

report with the partnership books and records. Reimbursement for

expenses incurred by the partner under this paragraph 4.2 above.

Section 4.5 Partner draws, cash advances, capital withdrawals.

Each partners draw, if any, upon future partnership profits

shall be set through an affirmative supermajority vote of the

partners. Likewise, cash advances, loans, or withdrawals of

capital by partners shall only be accomplished through the

affirmative supermajority vote of the partners.

ARTICLE 5.TRANSFERS OF INTEREST; WITHDRAWAL, DEATH, REMOVAL OF

PARTNER

Section 5.1 Transfer of partnership interest. Partners shall be

under no restriction regarding the sale, conveyance, assigned or

pledge of their partnership interests.

Section 5.2 Withdrawal of partner.

a. Partners shall have the unilateral right to resign or

withdraw from the partnership. A partner is required to give

thirty (30) days of written notice to each of the other partner

to initiate withdrawal from the partnership. In the notice, the

withdrawing partner shall state an effective date for his

withdrawal and said date must be at least thirty (30) days after

delivery of notice to all partners. Upon receipt of said notice,

the remaining partners shall cause a reasonable prompt

preparation of financial statements for the partnership as of

the effective date of withdrawal of said partner.

b. Upon withdrawal, the withdrawing partner shall receive,

in exchange for his partnership interest, the withdrawal

compensation amount to be paid within 1 year of the partner’s

withdrawal.

c. Should the partnership fail to perfomr to any

obligations under this section to make payments to a withdrawing

partner when due, the partnership shall, in addition to any

other remedies the withdrawing partner may possess, be liable to

the withdrawing partner of interest upon the amount of any

deficiency at the rate of 10% per annum compounded annually

computed from the date that said deficient payment was due to

the withdrawing partner under this agreement.

d. Upon withdrawal, the withdrawing partner shall have

no continuing obligation to the partnership other than pursuant

to state law, this agreement or other applicable laws or such

obligations as expressly assumed by such partners.

e. A withdrawing partner shall retain the right to

vote as a partner up until the effective date of her withdrawal,

at which time, the withdrawing partner’s partnership interest

shall be considered transferred back to the partnership, or as

the case may be, the other partners who purchased said interest

and the person who has withdrawn shall no longer be a partner.

SECTION 5.3. Removal of a partner. A partner may

involuntarily remove from the partnership if the partner has

defaulted upon his obligations under this agreement to make

capital contributions or loans to the partnership and if a super

majority of the partners vote affirmatively for the removal of

the partner.
 In this case of a removal, 30 days prior to any vote to

remove, the other partners shall cause a notice to be issued to

the partner in question stating that they shall bring to a vote

of a partners a motion to remove said partner for nonpayment of

requires capital contributions. The partner in question shall

have the 30 days within which to cure the default which shall

consist of making all required capital contributions plus 10%

per annum interest compounded annually upon the amount of any

deficiency computed from the date that the said contribution was

due to be made to the partnership.

If, after complying with the above notice and cure provisions,

an affirmative vote of the super majority vote of the partners

is made to remove the partner in question, then, as of that

moment, this person shall no longer be entitled to exercise any

rights, powers or privileges of a partner and her interest shall

be considered redeemed by the partnership.

Upon the affirmative of the super majority vote of the partners

to remove a partner, the remaining partners shall cause prompt

preparation of the financial statement for the partnership as of

the need of the month in which the resolution was passed by the

effective date of removal for the partner for accounting

purposes only under this agreement.

The removed partner shall receive in exchange for her

partnership interest the removal compensation amount to be paid

within 1 year of the effective date of the partner’s removal.

Should the partnership fail to perform upon its obligations

under this section to make payments to a removed partner when

due, the partnership shall, in addition to any other remedies

may possess, be liable to the remove partner for interest upon

the amount of any deficiency at the rate of 10% per annum

compounded annually computed from the date of the said deficient

payment was under this agreement.

ARTICLE 6 CAPITALIZATION

SECTION 6.1. Initial capital contribution. The initial capital

contributions of the partners shall be as set forth in this

section 3.1 of this agreement. Partners shall make a required

initial capital contributions to the partnership within 30 days

of the date of the execution of this agreement. Any partner who

fails to make the required initial capital contribution as set

forth in this section 3.1 shall indemnify the partnership and

all other partners or any losses or expenses including

reasonable attorney’s fees that are caused by the failure to

make the initial capital contribution as set forth.

SECTION 6.2. No interest capital contributions, unless otherwise

provided for in this agreement, no partner shall be entitled

upon her capital contributions to the partnership.

SECTION 6.3. Additional capital contribution. Additional capital

contributions can only be required under this agreement upon the

unanimous vote of all partners.

SECTION 6.4. Loans by the partners to the partnership. A

partnership may loan or advance money to or for the benefit of

the partnership when the terms of said loan have been approved

by a majority vote of the partners. In such cases, a loan from a

partner to the partnership shall bear interest rate approved by

the majority of the partners.

SECTION 6.5. Withdrawals of capital. Except as otherwise

provided in this agreement, no partner my withdraw capita from

the partnership without an affirmative majority vote of the

partners.

SECTION 6.6. Maintenance of capital accounts. An individual

capital account shall be maintained for each partner consisting

of the partner’s capital contributions and increase by the

partner’s share of partnership profits, decrease by the partners

share of partnership losses.

SECTION 6.7. Withdrawal of capital. Except as otherwise provided

in the agreement, no partner may withdraw portion of the capital

of the partnership.

ARTICLE 8 ALLOCATION O PROIT AND LOSSES

SECTION 7.1. Allocation of profits and losses. Net profits, net

losses, and other items of income, gain, loss, deduction and

credit of the partnership shall be allocated among the partners

according to the partner profit and loss percentage which is

prorated with the partners’ capital contribution.

Notwithstanding the foregoing, no item of loss or deduction of

the partnership shall be allocated to a partner to extent such

allocation would result in negative balance in such partner’s

capital account if other partners then have positive balances in

their capital accounts. Such loss or deduction shall allocated

first among the partners with positive balances and heir capital

accounts in proportion to and to the extent of such positive

balances and, thereafter (i.e., after the capital balances of

all partners has been reduced to zero), to all partners in

accordance with the partner profit and loss percentage.

ARTICLE 8 DISSOLUTION OF THE PARTNERSHIP

SECTION 8.1. Dissolution. The partnership shall be dissolved,

and its affairs shall be wound up upon the happening of any of

the following:

a. If the existence of the partnership is subject to a

definite term pursuant section 2.23 of this agreement,

then upon the expiration of the term stated in section

2.3 herein above;

 b. If the surviving partners do not elect to purchase the

partnership interest of a deceased or withdrawing

partner, then upon the death or withdrawal of a partner;

c. Upon the sale or other disposition of substantially all

of the operating assets of the business of the

partnership;

d. Upon the removal of partner at a time when the

partnership possesses only two partners;

e. Upon the required vote of the partners for dissolution of

the partnership as provided elsewhere in this agreement;

and

f. As otherwise provided pursuant to Philippine Partnership

Law.

SECTION 8.2. The person or persons responsible for winding up

the affairs of the partnerhip pursuant to this section shall

make a full inventory of the partnership assets, liabilities,

shall liquidate the assets of the partnership in a commercially

reasonable manner, and shall apply and distribute the proceeds

in the following order:

First, to creditors of partnership who are not partners in

satisfaction of the liabilities of the partnership owing to

them.

Second, the partner in satisfaction of liabilities of the

partners owing to them;

Third, to the partners and former partners to the extent for

their capital accounts; and

Fourth, to the partners same proportion and percentage as

partnership profits are allocated to the partners according to

the provision of section 7.1.

ARTICLE 9 MISCELLANEOUS

SECTION 9.1. Entire agreement. This agreement contains the

entire understanding among the partners any supersedes any prior

written or oral agreements between respecting the subject matter

contained herein.

There are no representations, agreements, arrangements, or

understandings, oral or written, between and among partner,

relating to the subject matter of this agreement that are not

fully expressed herein.

SECTION 9.2. Amendment. The provisions of this agreement may be

amended only by unanimous votes of the partners. Any amendment

of this agreement shall be in writing, dated, and executed by

consenting partners. If any conflict arises between the

provision of any amendment and the original agreement as

previously amended, the most recently provisions shall control.

The act of admission of new partner and said partners execution

of this agreement shall not be considered an amendment of this

agreement.

SECTION 9.3. Severability. Should any part of this agreement be

deemed void, voidable or unenforceable for any reason, such part

shall be severed from this agreement shall remain valid

according to the intent of the partners thereto.

 REFERENCES

Books:

ClarizeCopero, A feasibility Study on establishing

apartment at Navy Base Baguio City.