Ch 1 - Business Organization- Contractor's Licence

With any changes to the Partnership structure business a new license must be obtain within

90 days.

More requirements for LLC

- 100.000 surety bond (in addition to a $15.000 contractor bond) in case the LLC fails to pay wages. - Every member of an LLC (officer, member, responsible manager or director) must be listed as personnel of record. - Liability insurance with an aggregate limit of $1 million for a licensed LLC with 5 or fewer members. An additional $100.000 is required for every additional personnel of record, up to total of 5 million. - An LLC may serve as a partner on a partnership license or as part of a joint venture.

S Corporation

- An S corporation has special tax considerations that differ from a C Corporation. - S corporations are not inflicted with double taxation. - An S corporations's business income is reported as individual income. - An S corporation may not have more than 100 shareholders, and all of the shareholders must consent to the status of S corporation.

Project manager must consider the following key factors

- Budget limitations - Quality standards - Effective planning, specification, and coordination - Effective resource management handling

Disadvantages of S corporation

- Can only utilize domestic capital, as membership is limited to US citizens and permanent residents - maximum of 100 shareholders - Receives closer scrutiny (بررسی موشکافانه) from the IRS; has complex tax qualification requirements.

Disadvantages of C corporation

- Double taxation is unavoidable- taxes are levied on business profits as well as the individual dividend. - Complex structure is more expensive to establish - More legal requirements - Unlike S corporation doesn't carry the advantage of deducting corporate losses.

Disadvantages of partnership business

- General partners carry liability beyond their original investments - Limited life - Risk of disagreements on decisions - each partner is liable for the actions and losses incurred by the other partner (s)

Advantages of LLC

- Less public exposure of members - Less paperwork and documentation requirements - Financial reports are not disclosed publicly - LLC has limited liability for managers and members - Not affected by double taxation. No taxation at entity level

Advantages of S corporation

- More attractive to small business owners than C corporations. - The shareholders and management have limited liability protection. - Carries the advantage of pass-through taxation for its members; taxed as a partnership - This form of business has a perpetual existence (وجود دائمی) - S corporation have yearly tax requirement

Disadvantages

- Owners of LLCs must instantly recognize profits - LLCs carry fewer fringe benefits for owners and management - In most cases if a member leaves the LLC, the LLC ends - LLC profits are taxed with Medicare and social security

Advantages of C corporation

- Provide legal existence to a business - Carries limited liability for investors - Shares can be sold without limit - Unlimited life- stockholders determine when the corporation should be dissolved - Ownership is availed by simply buying shares

Advantages of partnership business

- Start up cost will be low - profits are shared among-est partners - Business affairs are private and external regulations are limited

Individual or Sole proprietorship

-This is a form of business that an individual owns all of the business's equity and sis solely responsible for debts and liabilities incurred by the business. -This is the easiest form of business to establish and requires minimum regulation. -It's not a separate legal entity. The owner is personally responsible for all financing. - Legal paperwork and requirements are not required to start up a sole proprietorship business.

Foreman

A foreman reports to the superintendent, and assists with daily project activities. A foreman is responsible for the supervision of precise trade areas. Foremen estimate the materials, equipment, supplies needed for routine work, and assign the crew as needed.

Joint Venture License

A joint venture license application is submitted by two or more separate licensees wanting to act together on contract work. Only the licensed businesses are permitted to be involved. Separate businesses may act together under this type of license; the license must be renewed every two years, just like a standard contractor's license.

Joint Ventures

A joint venture occurs when two or more organizations collaborate on a specific project. These companies share returns, risks, and governance in a new entity which may be managed as a corporation, LLC or partnership.

Superintendent

A superintendent supervises the daily onsite operations and progress on behalf of a manager. A superintendent keeps general project records, and controls the short term schedule.

What qualifies you as a C corporation?

An individual must file articles of incorporation with the Secretary of State. Government approval is needed to create this legal entity in order to allow a corporation to create and enter contracts.

Limited Liability Company (LLC)

In this structure members (owners) are not personally liable for the organization's debts liabilities, benefiting from limited liability protection. Unlike many types of corporations, an LLC does not offer liability protection for personal actions.

Structure of C Corporation

Includes a governing body of officers including a president, secretary, and treasurer. All positions can also be held by one person or several shareholders.

Calendar planner

Is the easiest method which works well for small jobs and business. The estimated starting and end date of each phase of the project and related time periods are recorded on calendar.

Functional management

It relates to the technical business aspects such as: - Planning: budget and schedule preparation. - Delegation: Training employees to handle day to day decision making responsibilities. - Standardization: Operations should be standardized. - Controls: Organizing job task records, monitoring progress, and noting warning signs before situations become unmanageable.

What information must bee included in a stop notice?

The kind of labor, services equipment, or materials furnished or agreed or agreed to be furnished

Critical path method (CPM)

This is the most complex and most effective method. the critical path method uses a diagram to divide a project into its component parts, and the order of task seqences that must be completed before the next one may begin. The CPM provides a better overall picture of the interrelated phases. The critical path is the one that has the longest completion time of the entire project. In this method any delays will delay the entire project.

Disadvantage of proprietorship

Unlimited liability- the owner personally liable for business liabilities Limited life - business dissolves once the owner passes away. Investors are unlikely to invest in this type of business.

Bar chart or Gantt chart

Uses a linear grid. Each phase of a project is noted vertically and project dates are noted horizontally. This chart will show the relationship between all phases, displaying which phases went beyond the estimated time.

within how many days must an "agreement to arbitrate" be returned by the participants after being mailed by CSLB's Registrar?

Within 30 calendar days

What is the transformation from one form of business to another is considered as?

a chain growth process.

A business plan includes

a cover page, the company's legal structure, facilities, the services being offered, analysis of the target market, a strategy for taking advantage of the target market, and financial statements (if available)

What is business organization?

an individual or group of people working together to accomplish certain business objectives.

According to California license law how often must safety meetings be held?j

at least every 10 working days.

Sole proprietorship Advantages

complete control of the business and decision making. Simple form of ownership, carrying minimal legal restrictions Less capital is required The owner enjoys the profit solely There is no corporate tax

General Partnership

each partner is liable to the extent of their personal assets and by law are accountable for the careless acts of other partners.

Management theory can be divided into two areas:

functional and behavioral

C Corporation

is a separate legal entity that can consist of one or more individuals. A C corporation is legally liable for its operations and its earnings are separately taxed. A C corporation does not terminate upon the death of one or more shareholders or the sale of stocks.

Partnership business structure

is not a separate entity for the partners. taxes are levied (imposed, charged) on the profit share of each individual and are shown as personal income.

Disadvantage of calendar planner

lack of an overall picture of the relationship between different phases of a project and the impact of how one phase's delay will affect the whole project.

Behavioral management

relates to the personal side of the business - Human relations: proper treatment of the personal - cooperation: PM ensures individuals work together - Responsibility: Each individual in a business should be given authority over, and held accountable. - Communication: individuals should be advised of any decisions that affect them personally. Executive Ability: as the size of the business increase, the contractor must spend more time in a managerial role.

Three basic scheduling systems can be used by a contractor:

the bar chart or Gantt chart the calendar planner the critical path method

Limited partnership

the partners do not hold the full business responsibility and are liable up to the extent of their original investment. Note: In a limited partnership, at least on general partner is held fully responsible for the liabilities and business operations.