Part 1: Company
Explain why the entity was chosen by the team and how the entity choice supports the overall vision for the business
The chosen business entity is a company. A company was chosen because of the interest in operating a business entity that is free and autonomous from its owners. Since the business entity belongs to a team of people, there was need of choosing the one that would be free from the manipulation of any individual. Moreover, this is the business entity that will not put personal assets of the owners at risk in case of liability (Kunkel et al., 2015).
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Additionally, there was the issue of raising capital as the operations of the business entity continue. For a company, there is the chance of offering stock or bonds to raise funds, which can be put in business expansion. It is only the company structure that allows the chance for this kind of borrowing.
It is vital to mention the fact that owners of a company are normally double-taxed on the profits they get. This is the drawback of running a company, particularly for the owners. However, it can be avoided by paying the profits to the owners in the form of compensation of rates. A company is not taxed on money paid from the profits as compensation.
Outline the role (officer or director), each team member, will play in the business, their responsibilities, and why they were selected for the particular role
Members of this team will be the directors of the company. As directors, each team member will have specific roles and responsibilities to play. There will be an overall director elected by the team members and known as the Managing Director. The role of the Managing Director will be running all the businesses of the company. He or she will be assisted in doing this role by the Deputy Managing Director, also elected by the team members. The other directors will responsible for the specific roles of financial control, recruitment of staff, production, and procurement.
Part 2: Disciplinary policy
The disciplinary policy of this company will help it in overcoming some challenges like employee discrimination risks as well as other job-related issues. Any director, who is equally a member of this team that acts or behaves in a manner contravening the set principles and rules of the company will be liable to punishment. The punishment will include 40% fine imposed on their profit shares and a 3 months suspension from the businesses of the company. During this suspension, the suspended individual will not be allowed into the premises of the company.
It is vital to understand the fact that this company does not condone employee discrimination based on gender, ethnicity, race, education, wealth class or age. All the employees must be treated equally. Therefore, any act of employee discrimination will attract a disciplinary action. This punishment described in the described in the disciplinary policy of the company will make directors fear to commit offenses like employee discrimination. Therefore, the disciplinary goes a long way in helping the company minimize the risk of employee discrimination.
Part 3: Succession plan
The succession process will be overseen by a Certified Public Accountant and an auditor (Clifford & Teodosio, 2008). All the team members, who have interests in the company will share out its worth according to their percentage investments (DeAngelo & DeAngelo, 2000). Set dollar esteem will be established to guide the succession process. After the resolution of the set dollar esteem, an extra security will; be sought on all shareholders in the business. If a shareholder chooses to leave the company before the association period with others expires, then the passing advantage will be used in purchasing the perished share in the business and circulate it similarly among the other shareholders.
The greatest challenge, in this case, is that it involves a lot of shareholders hence it is quite illogical for every shareholder to keep his personal goals on the others. There are chances of an imbalance between the shareholders in terms of guaranteeing. There can be issues regardless of the possibility that there are just two accomplices. Suppose one accomplice is 35 years of age and the other is 60 years of age; there will be a colossal difference between the separate expenses of the strategies. In this case, a substance buys understanding is regularly utilized.
References
Clifford, S., & Teodosio, A. (2008). An Owner's Guide to Business Succession Planning . Ohio Employee Ownership Center, Kent State University.
DeAngelo, H., & DeAngelo, L. (2000). Controlling stockholders and the disciplinary role of corporate payout policy: A study of the Times Mirror Company. Journal of Financial Economics , 56 (2), 153-207.
Kunkel,P., Wick, S. & Mooty, G. (2015). Choosing the Right Business Entity. University of Minnesota Extension , June 2015. Retrieved from http://www.extension.umn.edu/agriculture/business/taxation/farm-legal-series/choosing-the-right-business-entity/docs/choosing-the-right-business-entity.pdf on 13/1/2017.
