My AE Prep (Module 4)

Question 1

What factors can influence the type of legal structure that a firm chooses?

Answer 1

Number of employees

Number of offices

Number of partners

State licensing board requirements

Liability

Best ways to reduce taxes

Question 2

What are the three main types of legal structures for a firm?

Answer 2

Sole Proprietorship

Partnership

Corporation

Question 3

What are the four different types of corporations?

Answer 3

S Corporation (S-Corp) (Business Corporation)

C Corporation (C-Corp) (Business Corporation)

Limited Liability Company (LLC) (Professional Corporation)

Limited Liability Partnership (LLP) (Professional Corporation)

Question 4

What is an S Corp?

Answer 4

A business structure that allows income and expenses to flow through the individual business owner, who must pay taxes on that money.

Question 5

What is a C Corp?

Answer 5

A business structure that separates the individual from the corporation, and the individuals are paid as employees. Setting up and maintaining a corporation can be expensive and require an accountant and/or a lawyer. In addition, the firm will have to file separate corporate tax returns. The advantage to having this separate entity is to shield the individual partners from personal liability.

Question 6

What is an LLC

Answer 6

A business structure that is typically used for small firms cause it is the least complex business structure. Creating an LLC provides the simple tax advantages of a sole proprietorship with the liability protection of a corporation.

Question 7

What is an LLP?

Answer 7

A variation on the LLC that offers liability protections that are not available to general partnerships; the personal assets of partners are protected against liability from business claims, except in the case of fraud or other criminal wrongdoing.

Question 8

What are the characteristics of a Sole Proprietorship?

Answer 8

+ Least expensive structure
+ Simplest form
+ Included in individual’s tax return (no state or fed tax forms)

Individual = business legally
Terminated by death of individual

• Unlimited personal liability

Question 9

What are the characteristics of a General Partnership?

Answer 9

Like a sole proprietorship, but for multiple people.
Partners share in duties, profits, losses, management.

+ Business does not pay income tax on profits, these are passed on to the partners, who pay tax on their shares.

• Both partners have potential full liability

Question 10

What are the characteristics of an S Corporation?

Answer 10

Most common structure for architects.
Owned by shareholders who run the practice.
Profits passed on to shareholders.

• Architect can still be professionally liable.

Question 11

What are the characteristics of an C Corporation?

Answer 11

Clearly separates the individual from the corporation.
Allowed to have more than 100 shareholders.
Treated as a separate taxable entity by the IRS.

Question 12

What are the characteristics of an LLC?

Answer 12

Provides the liability protections of a corporation with the tax advantages of a partnership.

Members own the LLC

Classified as a corporate partnership for federal taxes

Question 13

What are the characteristics of an LLP?

Answer 13

Same tax advantages as LLC

Must have at least one managing partner who bears liability for the firm.

Non-managing owners receive liability protection.

Question 14

What is the general idea behind incorporation?

Answer 14

To add a layer of liability protection for the firm owners.

Question 15

What is an MBE?

Answer 15

Minority-owned Business Enterprise (>51%)

Question 16

What is a WBE?

Answer 16

Woman-owned Business Enterprise (>51%)

Question 17

What is a DBE?

Answer 17

Disadvantage-owned Business Enterprise (>51% veteran, disabled vet, or other)

Question 18

What is an SBE?

Answer 18

Small Business Enterprise

Question 19

What is a major advantage of MBE/WBE/DBE/SBE registration?

Answer 19

Most public RFP’s will favor these firms.

Question 20

What is EBD?

Answer 20

Evidence Based Design is the process of basing design decisions on actual scientific research to improve the project.

Question 21

What has EBD helped in healthcare settings?

Answer 21

EBD rooms can improve recover time, reduce medical mistakes, and even reduce accidental death.

Question 22

What strategies should be used to help EBD decision making?

Answer 22

1) Start with identifying the problems
2) Use an integrated multidisciplinary approach
3) Patient & Family Focus
4) Life Cycle Cost! Not just upfront
5) Participation + Criteria Management (decision trees)
6) Incentive-linked criteria (surveys)
7) Use partnership to create products
8) Simulation + Testing
9) 30-50 year ROI analysis
10) Over communicate!

Question 23

When determining the best approach to a new project, what should the architect consider?

Answer 23

Project Issues:

• Potential problems
• Potential delays
• Project delivery method
• Permit approval process
• Amount of detailing needed

Firm Issues:

• Current workload in the office
• Other deadlines
• Staff availability

Owner Issues:

• Owner availability
• Owner involvement
• Owner’s experience with projects

Question 24

What kind of tasks may be included in an RFP?

Answer 24

• Interviewing the occupants
• Developing several design options
• Analyzing the site
• Identifying major project challenges
• Building some additional time as contingency
• Suggesting the project delivery method
• Looking at sustainable design approaches
• Researching Precedents

Question 25

What are some best practices for a project?

Answer 25

• Weekly staff meetings
• Weekly project manager meetings
• Standard file organization
• Standard forms
• Code Review early in project
• Planning Review early in project
• Standard meeting minutes
• Standard cover letters, memos, etc.
• Archive emails
• Internal comm. platform (Teams, Skype)
• Record meetings with owner
• Unique project code
• Weekly staffing reports
• Internal QA/QC

Question 26

What three types of things are in the construction documents

Answer 26

Drawings (the design)
Project Manual (bidding, contracts, specs)
Specifications (quality and workmanship of the work)

Question 27

What are the four costs associated with quality?

Answer 27

• Prevention Costs, it costs to train staff how to do things the right way
• Appraisal Costs, the cost in time to review the drawings diligently before sending them out.
• Internal Failure, project or process failures, such as incomplete drawings.
• External Failure, a failure after the delivery of drawings.