Ballast RM - Biz Op

Question 1

Biz op types

Answer 1

1. Sole prop (individual name owned)
   Easy setup, tax deduction, full control BUT full debt and loss responsibility
2. General/Limited partn
   >= 2ppl sharing management profit and risk
   (limited partner invest instead of manage but profit per investment)

Partn personal liable

Easy to form, advisable with partn agreement. Partners with particular talent

3. Corp (filed to state office)
   Legal entity(association of individuals) + members
   Shareholders - Directors - Officers
   Personal asset safe, taxed lower than individual rate; High cost to setup and maintain

S Corp for small biz(<100 shareholder)
Profit and loss proportionally allocated to shareholder

Prof Corp

4. LLCompany LLP
   Members(invest, no personal liability) + Managers
5. Joint Venture
   TEMP association of >=2ppl for specific project/goal
   Treated like partn

Question 2

L partn vs LLCompany

Answer 2

LP partner personal liable

LLC member’s investment liable but no personal

Question 3

Office Orgs: Department vs Studio

Answer 3

1. Department Org(Horizontal/Flat)
   Marketing - Design - Sepcs - CD - CA
   Efficient vs inflexibility and hard communication/ innovation
2. Studio Org (Vertical/Tall)
   Studio per entire project
   Close communication strong PM system
   Better communication among team; manager daily contact with team; teamwork synergy.

Question 4

Office Org

• Regulations Governing
  1. Biz license
  2. tax
  3. professional licensing and Regulations

Answer 4

• Biz Licenses, allows to practice, basis for taxation
  Corp must register with state; ID # by secretary of state’s office.

LLCorp/ Professional LLCorp: LLC certificate/ biz license required

• Tax

Sole P or some partn, tax filed quarterly, pay self employment tax

Partnerships pay federal and state income tax, self-employment tax and personal property tax on furniture used by business.( No goods and service tax, which is for domestic consumption)

Arch firm subject to city income tax, employment tax, occupational privilege tax and use tax. Property tax assessed also if firm owns property.

Question 5

Ethical Standards

AIA Code of Ethics & Professional Conduct:

Answer 5

Canons(broad principles), Ethical Standards (Aspiring goals), Rules of Conduct (mandatory).

Question 6

Human Resource

• hiring
• evaluations
• Legal Requirement

Answer 6

• freelance/ independent contractor,
  to avoid withholding tax, paying benefits, establishing relationship. Not IRS enployment

For specific project, free on where and how to perform, no benefits, multiple firms Okay, set fee or hourly basis established in advance.

-salary review separate from performance review

• Employee Involvement
  Employee Stock Ownership Plan: trust setup, allocate stock, fully vested.

-Legal Requirement

> =50 ppl: 12 wks of unpaid leave for family/ health issue.

Question 7

Compared to Corporations,

S Corp is

Answer 7

1. beneficial when tax rates are lower for individual than the Corp;
2. no Corp tax( when tax rates favor the individual over the Corp, it is beneficial to form S Corp and avoid the tax on corp tax);
3. Liability is limited to shareholder’s investment.

Question 8

Laws for Employees with 13+

Answer 8

COBRA of 1986 统一综合预算协调法案
Civil Rights Act of 1991
Age Discrimination in Employment Act (ADEA) of 1967

Question 9

Laws for 50+

Answer 9

Family and medical leave Act (FMLA):

up to 12 wks