Organizational Plan
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ORGANIZATIONALPLAN
DISCUSSIONONB a s e d o n t h e P e r s p e c t I v e o f B a n g l a d e s h
S.M. Al-Amin
BBA 027 07837
Arifur Rahman
BBA 027 08076
Rizwana Chowdhury
BBA 027 08094
Israt Ara Khan
BBA 027 07393
An Organizational Plan is basically a “to do” list for an organization.
It lists out the plan of work, programs, and organizational growth over a period of time - six months, a year or five.
The tasks involved, who is responsible for them, and when they’ll be done.
• Set priorities for work• Make sure tasks get done on time• Focus on one thing at a time• Share work among staff, board members & volunteers• Make goals clear to investors• Get a handle on big projects by breaking them down• See the big picture of what organization is doing
An Organizational Plan Helps To:
•Management’s ability and commitment to the new venture are significant to investors.
•Investors demand that the management team not operate the business as part time venture.
developing the
management team
•management team to operate the business full time at a modest salary
•Drawing out large salaries for the management team is unacceptable to an Entrepreneur and considered to be a lack of psychological commitment to the business
basic legalforms
are
Proprietorship form of business with single owner; unlimited liability; control over all decisions; receives all profits
Legal forms of
Business
Partnership form of business with 2 or more individual with unlimited liability, pooling resources to own a business.Corporation form of business with separate legal entity, run by stockholders having limited liability & regulated by statute
FactorsProprietorshi
pPartnership Corporation
Ownership
IndividualNo Limitation on
Number of partners
No Limitation on number of
stockholders
Liability of Owners
Individual Liable for business Liability
In general partnership,
individuals are liable for business
liabilities. In Limited
Partnership partners are
liable for capital contribution
Amount of capital
contribution is limit of
shareholder’s liability
Factors of the three forms of
Business Formation
FactorsProprietorshi
pPartnership Corporation
Costs of Starting Business
Only Filing Fees for
trade name
Partnership agreement,
legal cost, and minor filing fees for trade name.
Limited partnership
requires more comprehensive
agreement, hence higher
cost
Created only by statute, Articles
of incorporation,
filing fees, taxes, and fees
for states in which
corporation is registers to do
business
FactorsProprietorshi
pPartnership Corporation
Continuity of
Business
Death dissolves the
business
Death or withdrawal of one partner terminates partnership
unless partnership agreement stipulates
otherwise. In limited
partnership death or
withdrawal of one partner has
no effect on continuity.
Limited partners can withdraw
capital six months after
notice is provided
Greatest form of continuity. Death or
withdrawal of owner(s) will
not affect legal existence of
business
FactorsProprietorshi
pPartnership Corporation
Transfer-ability of interest
Complete freedom to
sell or transfer any
part of business
General Partner can transfer
his/her interest only with
consent of all other general
partners. Limited partner can sell interest without consent
of general partners.
Stockholders can sell or buy stock at will.
Stocks’ transfer may be
restricted by agreement. In S
corporation, stock may be
transferred only to an individual
Capital Requirem
ents
Capital raised only by loan or increased
contribution by
proprietor.
Loans or new contributions by partners require
a change in partnership agreement
New Capital raised by sale of stock or bonds or by borrowing in name of Corp. In S Corp. only
one class of stock & limited
to 75 shareholders
FactorsProprietorshi
pPartnership Corporation
Management
Control
Proprietor makes all
decision and can act
immediately
All partners have equal control and
majority rules. In limited
partnership, only the general partners control
the business.
Majority stockholder(s)
have most control from legal point of view. Day-to-day control in
hands of management
who may not be major
stockholders.
Distribution of
profits and losses
Proprietor responsible and receives
all profits and losses
Depends on partnership
agreement and investment by
partners.
Shareholders can share in
profits by receipt of dividends
Attractive-ness for raising capital
Depends on capability of proprietor
and success of business
Depends on capability of partners and
success of business
With limited liability for
owners, more attractive as an
investment opportunity
Tax Attributes of Forms of Business
Attributes Proprietorship Partnership Corporation
Taxable yearUsually a
calendar year
Usually calendar year but other day may be used
Any year can be used at
beginning. Any changes in
incorporation
Distribution of profits to owners
All income appears on
owner’s return
Partnership agreement may have
special allocation of
income. Pardoners pay
tax on their pro rata
shares income on individual return even if
income not immediately distributed
No income is allocated to stockholders
Attributes Proprietorship Partnership Corporation
Organization costs
Not amortizable Amortizable
over 60 monthsAmortizable
over 60 months
Dividend received
$100 dividend exclusion for single return and $200 on joint return
Dividend exclusion of partnership passes to partner
80% of more of dividend
received may be deducted
(after 12/31/86)
Capital gain
Taxed at individual level. A deduction is
allowed for long term
capital gains
Capital gain to partner will be
taxed as a capital gain to the partner
Taxed at corporation
level. After July 1, 1987 the
maximum rate will be 34%.
Capital lossesCarried forward
indefinitely
Capital losses can be used to
offset other income.
Carried forward indefinitely
Carry back three years and carry over five years as shore,
term capital loss offsetting
only capital gains.
Attributes Proprietorship Partnership Corporation
Initial organization
Commencement of business results in no
additional tax for individuals
Contribution of property to a
partnership not taxed
Acquisition of stock for cash
entails no immediate
taxes. Transfer if stock value greater than contributed
property
Limitations on losses deductible
for real estate activities
Amount of risk may be
deducted except for real
estate activities
Partnership investment
plus share of resources
liability if any. At risk rules may apply
except for real estate
partnership
No losses allowed except on sale of stock or liquidation
of corporation.
Attributes Proprietorship Partnership Corporation
Medical Benefit
Itemized deduction for
medical expense in excess of
adjusted gross income on
individual’s return. No
deduction for insurance premium
Cost of partner’s
benefit is not deductible to
business as an expense. Possible
deduction at partner level
Cost of employee
shareholder coverage
deductible as business
expense if designed for benefits of employee.
Attributes Proprietorship Partnership Corporation
Retirement benefits
Limitation and restrictions
basically same as regular
corporation
Same as for corporations
Limitations on benefits on
benefits from defined plans-
lesser of $ 90,000 or 100% of corporation. Limitation on
contribution to defined
contribution plans-lesser of
$ 30,000 or 25% of
compensation ( 15% of
aggregate for profit-sharing
plans)
The team must be able to accomplish
three functions:
•Execute the business plan
•Identify fundamental changes in the business as they occur
•Make adjustments to the plan based on changes in the environment and market that will maintain profitability
building the
management team
Once legal form of organization is determined, the entrepreneur will need
to prepare a job description and job analysis.
building a successful
organizational culture
The job analysis will be serving as a guide in determining hiring procedures, training, performance appraisal, compensation program, and job description and specification.
Job description Specify the details of the work that is to be performed and any special conditions or skill involved in performing the job. Job description should contain a job summary, skills or experience required, a summary of the responsibilities and duties the authority of the individual and standards of performance.
building a successful
organizational culture Job specification
outlines the skills and abilities needed to perform the job including prior experience. Outlining the job specification for a trained employee is easier than for the untrained people who will be trained on the job. So the entrepreneur should focus on specific qualities that will be required, such as personality, physical traits, interest, or sensory skill.
•Reviewing operating and capital budgets
•Developing long-term strategic plans for growth and expansion
role of the Board of Directors
•Supporting day to day activities
•Resolving conflicts among owners or shareholders
•Ensuring the proper use of assets or
•Developing a network of information sources for the entrepreneurs
The member of
board members should be carefully selected considering the following
criteria
selecting Board members
• Select individuals who can work with a diverse group and will commit to the venture mission
• Select candidates who understand the market environment or can contribute important skills to the new venture’s achievement of planning goals
• Select candidates who will show good judgment in business decision making
Board of
Advisors• Loosely tied to the organizations
• Serve the venture in an advisory capacity
• Has no legal status
• Meet less frequently; depending on the important venture decision
• Useful in a family business
• Selection process similar to the BOD
• Compensated per meeting basis or with stock
• Provide reality check
Uses of Board of Advisors
• Formal part of a venture
• Outside advisors, such as lawyers, accountants, ad agencies, etc.
thank
you
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