Business Structure Flashcards
What is a business started, owned, and operated by one individual?
sole proprietorship
What is fiduciary responsibility?
to act in the best interests of another person or entity
What are the 3 main types of partnerships?
general partnership, limited partnership, limited liability partnership/LLP
What is a partnership called when the partners are personally liable in lawsuits or for other legal claims?
general partnership
What is a partnership called when someone besides the working partners have invested in the business?
limited partnership
What type of partnership is generally limited to licensed professionals such as accountants, lawyers, architects, physicians, and engineers?
limited liability partnership/llp
What is a hybrid of the general partnership or sole proprietorship and the corporation and is afforded the limited liability protection of a corporation?
LLC
What protects employees, mostly union employees, from unfair labor practices by employers?
National Labor Relations Act (Wagner Act)
What is determined based on the amount of money an employee is paid (salary rate) plus the costs for the employee’s fringe benefits, plus the cost of office overhead, plus allowance for profit?
billing rates
What is used to determine the billing rates?
net multiplier
The net multiplier is a factor derived by dividing net revenue of the design firm (no consultants or reimbursable) by the cost of __
direct labor
With __ , the costs of providing taxes, benefits and the like are included with the employee’s base salary.
DPE direct personnel expense
What type of insurance protects the designer things such as incorrect specifications, mistakes on drawings, and incorrect installations of furniture?
malpractice or errors and omissions
What is a document prepared by the client that contains the specific information the client is seeking from the interested design firm?
RFP (request for proposal)
What is a statement by an insurance company that ensures completion of the project should the contractor default on its obligations?
Performance bond
What promises payment to labor and for materials by a defaulting contractor?
labor and material payment bond
What are the four elements that must be included in a contract?
(1)an offer (2)acceptance (3)consideration (4)mutual agreement
What secures the Owner and Interior Designer against loss or damage if a person is injured because of the Contractor’s negligence?
indemnification
What are agreements between the owner and contractor or vendor that are used for large projects with a fixed payment amount? Include schedule, cost, and scope of work.
A series agreements
What are agreements between the Owner and Architect or Designer? Outlines basic, supplemental, or additional services.
B series agreements
Under the Standard Form of Agreement, what activities are included in an interior designer’s services?
design development, specification production, shop drawing review, and final punch list
What constitutes “Additional Services” to a project proposal?
Additional work the client may want to add after the initial contract is signed.
What is the first thing you should do before an initial meeting with a client?
Determine the needs, wants, and characteristics of the project.
A designer would include this in an owner-designer agreement to avoid the possibility of a costly and drawn out legal process?
provisions for arbitration
What’s the most legally binding aspect of design?
specifications
What is an agreement between the landlord and tenant that details the initial tenant improvements (TI) to be built?
Tenant Work Letter
What fee structure is a specified fee that will cover all the work and expenses required in the project scope of services? This fee cannot be increased beyond the fixed amount.
lump-sum fixed fee
What fee structure is service that is billed for each hour or part of an hour for work on behalf of the client based on an hourly rate?
Hourly billing
What fee structure is like the “no upset” fee, this sets a maximum that the designer can not go over without prior approval from the client?
not-to-exceed fees based on hourly billing
What fee structure is commonly used in residential design. The client pays a specific markup on the actual cost of the merchandise and other items that the designer sells to the client?
cost-plus percentage markup
What fee structure is commonly used in commercial design by contractors? The client pays the actual cost of the work plus an amount for the overhead and profit. This includes all trade subcontractor work, labor, materials, and equipment.
cost-plus fixed fee
What fee structure is more common in commercial projects? The fee is determined by a rate per square foot multiplied by the amount of square footage of the project.
square foot pricing
What fee structure is based on a negotiated percentage of the construction cost or the cost of goods and installation for the project?
Percentage of actual construction/merchandise cost
What fee structure prices services based on the value or quality of the services instead of focusing on the cost of providing those services?
value-oriented method
How would a project manager keep track of the progress of the job to see if the planned aspects of time and fee are being accomplished?
by comparing weekly time sheet with original estimates
