Lesson Plan

Lesson Plan: Nuggets of a Dynamic Business Structure

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Lesson Plan: Nuggets of a Dynamic Business Structure

Definition of Business

Under the Business Law, a business is termed as a legal practice that comprises of activities such as the production of goods, purchase and dissemination of products or rendering services by engaging an individual or a group of individuals with an aim to earn profits along with the drive of satisfying the consumers ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"FU11BtJM","properties":{"formattedCitation":"(Needle, 2010)","plainCitation":"(Needle, 2010)","noteIndex":0},"citationItems":[{"id":78,"uris":["http://zotero.org/users/local/2y0xTiQs/items/GP4RHYKE"],"uri":["http://zotero.org/users/local/2y0xTiQs/items/GP4RHYKE"],"itemData":{"id":78,"type":"book","edition":"5th ed","event-place":"Andover","ISBN":"978-1-84480-613-3","language":"en","number-of-pages":"578","publisher":"Cengage Learning","publisher-place":"Andover","source":"Gemeinsamer Bibliotheksverbund ISBN","title":"Business in context: an introduction to business and its environment","title-short":"Business in context","author":[{"family":"Needle","given":"David"}],"issued":{"date-parts":[["2010"]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Needle, 2010).

Types of Business

Depending on the nature and scope of the organizational operations, the business entities are categorized into four different legitimate forms:

Sole Proprietorship

The form of business which is solely run by an individual. The sole proprietors own the equity and the profits earned and are liable for the debts and expenses incurred by the trade. This form of business is not considered as a legal entity and the owner and the business are non-separable (Nithman, 2015).

Partnership

An association among two or more individuals that participate in business to raise mutual benefits (wealth) which is then shared amongst the partners on a contracted proportion. This type of business obliges the partners to sign a legal agreement to engage in a business activity entailing the details of business name, period, capital from the partners, and their share, etc., but it is not considered as a legal entity.

Limited Liability Company

A form of business that is legally entitled to do business, separate from the individual proprietors. Such companies are required to be registered with the Corporate Affairs Commission and the Memorandum and Articles of Association.

Corporation

A separate, legitimate business entity managed by a group of individuals or companies recognized as a Board of Directors (Bayern, 2016).

Tax Classifications

In the US, tax classification determines how the entities desire to be viewed by IRS i.e. Internal Revenue Service from a tax viewpoint CITATION Wri18 \l 1033 (Wright, 2018).

In the case of a sole proprietorship, both the business forms are not legal entities due to which the liabilities, expenses, and income belong to the owner of the businesses who can pay off its debts and tax liabilities by selling its assets and profits.

Conversely, the Corporations are recognized as lawful entities which although enjoy reduced tax rates as compared to single taxpayers but are liable to double taxation i.e. when the same owner and shareholder pay tax twice on a single income source.

In a Limited Liability Company, the profits solely belong to owners but they are taxed with personal tax rates that greater than the corporate rates.

SMART Timeline to Begin Structuring a Business

To start a new business, the organizational goals play a vital role in directing the operations and success of the business. So the first step of an organization is to set goals which should be SMART i.e. an acronym for the following elements ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"Ylgo6wZb","properties":{"formattedCitation":"(Shahin & Mahbod, 2007)","plainCitation":"(Shahin & Mahbod, 2007)","noteIndex":0},"citationItems":[{"id":85,"uris":["http://zotero.org/users/local/2y0xTiQs/items/LY8Q52MZ"],"uri":["http://zotero.org/users/local/2y0xTiQs/items/LY8Q52MZ"],"itemData":{"id":85,"type":"article-journal","abstract":"Purpose – The purpose of this paper is to provide an integrated approach that prioritizes organizational key performance indicators (KPIs) in terms of the criteria of SMART (Specific, Measurable, Attainable, Realistic, Time‐sensitive) goal setting. Design/methodology/approach – The research was carried out using the analytical hierarchy process (AHP) technique as the basis for pairwise comparisons of SMART criteria, considering each KPI. Findings – A new approach is outlined, encompassing step‐by‐step guidelines for decision makers to conduct the prioritization process of SMART KPIs. The results of the case study highlight the applicability of the proposed approach and the calculation process for prioritizing KPIs. Research limitations/implications – The rating scales used in the AHP analysis are conceptual; although it identifies which dimensions require improvement, the proposed approach does not provide guidance on an appropriate action plan to address deficiencies; another limitation is that the framework adopted only the SERVQUAL service dimensions. Originality/value – This paper gives a novel approach for prioritization of KPIs. The proposed approach has a holistic mechanism; it could empower decision‐making teams; it is capable of enhancing advanced quality engineering approaches; and provides great opportunities for future research.","container-title":"International Journal of Productivity and Performance Management","DOI":"10.1108/17410400710731437","ISSN":"1741-0401","issue":"3","page":"226-240","source":"Emerald Insight","title":"Prioritization of key performance indicators: An integration of analytical hierarchy process and goal setting","title-short":"Prioritization of key performance indicators","volume":"56","author":[{"family":"Shahin","given":"Arash"},{"family":"Mahbod","given":"M. Ali"}],"issued":{"date-parts":[["2007",1,1]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Shahin & Mahbod, 2007):

Specific goals are clear and precise which helps the business to move in a specific direction.

Measurable in terms of quantity and quality to determine the success of the objects.

Attainable goals can only determine its feasibility.

Realistic and result-oriented goals are determined by the availability of resources and performance indicators.

Time-sensitive goals follow a time frame helping firms to measure their success.

Legally-binding Agreements (Contracts)

Under the state and federal contractual legislation, an agreement that obligates two or more parties to follow the terms and conditions of the contract ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"hKKgpN5K","properties":{"formattedCitation":"(Stim, 2016)","plainCitation":"(Stim, 2016)","noteIndex":0},"citationItems":[{"id":89,"uris":["http://zotero.org/users/local/2y0xTiQs/items/Y868YBVD"],"uri":["http://zotero.org/users/local/2y0xTiQs/items/Y868YBVD"],"itemData":{"id":89,"type":"book","abstract":"Life has become an endless series of contracts—this is the manual. There’s no reason to risk your hard-earned money signing a contract you don’t understand. With Contracts: The Essential Business Desk Reference, you get easy-to-understand explanations for every common contract term. In no time, you’ll grasp mysterious concepts such as “waiver,” “indemnity,” and “most favored nation.” Contracts: The Essential Business Desk Reference is more than just an A–Z explanation of over 300 terms. It also includes: common negotiating strategies examples of contract provisions sample contracts with explanations illegal and dangerous contract clauses to watch out for what to expect if a contract is broken up-to-date explanations of electronic contracts, and tips on amending and modifying agreements. Whether you’re starting a business, signing a lease, hiring a new employee or independent contractor, licensing a concept, selling a boat, or contracting for a new fireplace, Contracts: The Essential Business Desk Reference can help. A must-have for small business owners, entrepreneurs, lawyers, and law students—and anyone else whose success is built around understanding and negotiating agreements.","ISBN":"978-1-4133-2300-9","language":"en","number-of-pages":"497","publisher":"Nolo","source":"Google Books","title":"Contracts: The Essential Business Desk Reference","title-short":"Contracts","author":[{"family":"Stim","given":"Richard"}],"issued":{"date-parts":[["2016",8,31]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Stim, 2016)

Evaluation test

#

Questions

Yes

No

May be

1.

Have you understood the types of business entities?

2.

Does the definition of business appropriate?

3.

Do you find the differences among the types of business entities?

4.

Are the characteristics of sole-proprietorship described sufficiently?

5.

Do you have an understanding of the Corporation business type?

6.

Is the description of tax classifications ample to know tax liability?

7.

Whether the SMART goals help in the structuring of business?

8.

Do you have an understanding of double taxation?

9.

Does the explanation to contracts describe them fully?

10.

Do you feel the provided explanations for the topics are up to date?

References

ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY Needle, D. (2010). Business in context: An introduction to business and its environment (5th ed). Andover: Cengage Learning.

Shahin, A., & Mahbod, M. A. (2007). Prioritization of key performance indicators: An integration of analytical hierarchy process and goal setting. International Journal of Productivity and Performance Management, 56(3), 226–240. https://doi.org/10.1108/17410400710731437

Stim, R. (2016). Contracts: The Essential Business Desk Reference. Nolo.

Bayern, S. (2016). The Implications of Modern Business–Entity Law for the Regulation of Autonomous Systems. European Journal of Risk Regulation, 7(2), 297-309. BIBLIOGRAPHY \l 1033

Wright, E. (2018, October 25). 3 Types of Business Tax Classifications. Retrieved from Spring Hill chamber of Commerce: https://springhillchamber.com/3-types-of-business-tax-classifications/

Nithman, R. W. (2015). Business Entity Selection: Why It Matters to Healthcare Practitioners: Part I-Conceptual Framework, Sole Proprietorships, and Partnerships. The Journal of medical practice management: MPM, 30(5), 358.