5 - Legal Structures

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5 - Legal Structures by Mind Map: 5 - Legal Structures

1. Self Awareness

1.1. Tolerance for risk

1.1.1. Mitigated by careful choice of clients and projects

1.1.2. Provide health insurance

1.1.3. Following best practices n terms of agreeements and documentation

1.2. Level of Comfort with collaboration

1.2.1. Control-centered practices Solo Practitioners Sharing only minimum necessary for subconsultants

1.2.2. Collaboration-centered practices Information, knowledge, drawings (or models) are shared with team participates IPD: Integrated Project Delivery

2. Writing a Business Plan

2.1. Marketing

2.1.1. Relationship-building and networking plan

2.1.2. Target market

2.1.3. Key differentiators

2.1.4. Image and brand

2.1.5. External market conditions and competition

2.2. FInance

2.2.1. Revenue goals over time

2.2.2. Scenario plans for firm revenue and staffing over time

2.2.3. Profit plan over time

2.2.4. Operating budget expectations over time

2.2.5. Financial expectations of owners

2.3. Operations

2.3.1. Organization Structure

2.3.2. Project delivery model

2.3.3. Technology upgrades and integration

2.3.4. Knowledge acquisition and development

2.3.5. Promotion, recruitment, and compensation

2.4. Purpose

2.4.1. Firm Future, including transition plan

2.4.2. Project Types? Client Types?

2.4.3. Core Competence an Core Weaknesses

2.4.4. Firm Size

2.4.5. Market Opportunities and threats to market position

2.4.6. Career Contentment and Disposition of Owners

2.4.7. Philosophy / Core Values

2.5. Documentation of intentions and proactive measures to accomplish goals



3.1.1. Expertise - Experience


3.2.1. Generalist: Complex Projects


3.3.1. Specialists: Routine Project


3.4.1. Generalist: Complex Project


3.5.1. Specialist: Complex Projects



3.8. Strategic

3.9. Opportunistic

3.9.1. Most start this way

3.10. Expertise-Based

3.10.1. Profitability depends on high hourly rates for services

3.10.2. Administrative help advisable to free principals to do billable work

3.10.3. Service offering deep knowledge/exceptional talent "starchitects"

3.11. Experienced-Based

3.11.1. Initial management challenge is to match project task to "pay-grade"

3.11.2. Ability to organize and deliver significant and complicated projects

3.11.3. True Experience-Based:Proficient at solving non-routine and complex design problems

3.11.4. Most small firm leaders use this model

3.11.5. deep experience but engage in routine projects

3.12. Efficiency-Based

3.12.1. Profitability depends on volume and productivity

3.12.2. Focused on less-expensive project delivery

3.12.3. Narrow range of services

3.12.4. Clients looking for standard solutions and quick turn arounds

3.12.5. Do Significant amount of routine work Hire less experience for production assistance

4. General partnership

4.1. Does not pay federal taxes. Each partner's share of income passed thru individual's tax return

4.2. Every state has their Uniform Partnership Act: Defining ownership and control of a partnership

4.3. 2 or more architects

4.4. All partner actively participate in management

4.5. Each general partner is potentially liable for the other. Up to their personal assets

5. Sole Proprietorship

5.1. Tax Perspective: a Disregarded entity. All Income is files thru owner's tax return and only taxed there.

5.2. May be given its own name. In legal terms not independent identity

5.3. No liability protection

5.4. Disssolves upon owner's death

6. LLP -Limited Liability Partnership

6.1. Offers liability protection not available to general partnerships

6.2. Personal assets protected except for fraud and extreme wrongdoing

6.3. Written partnership and LLP Certificate filed with Secretary of State's Office

7. Publicly Traded /Subchapter C Corporation

7.1. Limited overlap among participants

7.2. Controlling ownership is typically held by outside stockholders not actively involved in management of firm

7.3. Large firms with publicly trade in the stock exchange

7.4. Taxes paid on their income

7.5. Double Taxation

7.5.1. After-tax credit profits can be passed through to the stockholders in form of dividents to be taxed a second time in the stockholder's individual tax return

8. Closely Held/Subchapter S Corporation

8.1. The most common legal structure for firms(28%)

8.2. S Subchapter: no more than 100 stockholders. US or residents may not elect to pay federal taxes

8.2.1. Individual stockholder's tax return Profits in the form of dividends Limited amount of corporate losses

8.2.2. To ensure ownership remains in corporation a stockholder agreement contains restrictions on the transfer of stock

8.3. Some stockholders also act as corporate director and officers

8.4. Owned by stockholders actively engaged in the practice

9. Business Corporation

9.1. Most Common form of legal entity

9.2. Participants

9.2.1. Officers Elected by Directors Carry day-to-day management of the corporation

9.2.2. Stockholder Owners. Have Shares of stock

9.2.3. Directors Elected by stockholders Responsible for broad policy decisions Have Fiduciary duty to act in their best interests

10. Professional Corporation

10.1. Rarely selected in states where architects may also practice as business corporation

10.2. Subject to further restrictions on ownership, liability protection, and insurance

10.3. In some states the professional corporation is the only only permitted for a firm

11. LLC

11.1. Participants

11.1.1. Members are owners of LLC Personal assets other than ownership are protected against liability for business claim except for fraud or extreme wrongdoing Remains liable for their own negligence even when acting on behalf of the corporation

11.1.2. Managers are elected by members Typically responsible for both policy and day-to-day managements of the LLC Have fiduciary duty to act in their best interest

11.2. Closely held

11.2.1. May also act as managers

11.2.2. Owned by members actively engaged in the practice

11.3. Tax Purpose: May elect to be treated as

11.3.1. If, will not pay federal taxes instead, a member's share of income and losses are passed thru the individual tax return Sole Proprietorship partnership

11.3.2. Corporation

12. Government Filing Requirements

12.1. Secretary of State's Offices

12.2. State Architectural Registration Board

12.2.1. COA: Certificate of Authorization

13. Considerations

13.1. Informal Management Practices

13.1.1. Titles define responsibilities for project and firm management Associates Principal

13.2. Actions on behalf of the firm

13.2.1. Signing contracts

13.2.2. Issuing letters and drawings.

13.2.3. Legal documents


14.1. Global Practice

14.1.1. collaboration with local associate firms

14.1.2. Advance in technologies and telecommunications

14.2. Collaboration

14.2.1. Contract Production staff

14.2.2. Constructions phase with contractors

14.2.3. Consultants

14.2.4. Architect-Led Design-Build

14.3. Infrastructure

14.3.1. File-sharing technologies

14.3.2. BIM

14.3.3. Online project communications

14.3.4. Multiplatform collaboration

15. Financial Setup

15.1. Marketing

15.1.1. Social Media 1. Who is potential audience 2.Motivations and objectives behind 3. Commitment and level of effort to maintain applications

15.2. Financial Resources

15.2.1. SBA Loans

15.3. Infrastructure

15.3.1. Telecommunications

15.4. Logistics

15.4.1. Facilities Shared offices Rental Office Spaces or "executive" suites Coworking Spaces Virtual Offices

16. Purpose

16.1. Ethical & Socially responsible

16.2. Image, reputation & brand

16.3. Align w/business model

16.4. Financial Goals

17. Finance

17.1. Community Giving

17.2. Reduced waste

17.3. Budget tracking and control

17.4. Financial Planning

18. Marketing

18.1. Align message w/purpose

18.2. Marketing budget

18.3. Outreach to new prospects

18.4. Improve marketing processes

19. Operations

19.1. Align continuing education with purpose

19.2. Operation budgets

19.3. Market operational successes

19.4. Improve production processes


21. Why Firms Fail

21.1. 1. Lack of or inability to execute a business plan

21.2. 2. Slim or no-revenue pro forma (projections)

21.3. 3. Limited Business Opportunities

22. WHY?

22.1. Why Business Use Strategic Planning

22.1.1. Create positive changes and outcomes that align with values and professional aspirations


22.2.1. Programming Determine Client's need

22.2.2. Schematic Design Creative, big picture Concepts

22.2.3. Design Development More Defined building Systems

22.2.4. Construction Documents Detailed drawings and specifications

22.2.5. Construction Contract Administration Assessing and maintaining progress


22.3.1. 1. MISSION Purpose of the Firm Mission Statement

22.3.2. 2. ViISION Firm's aspirations for the future well articulated vision regardless of size Time-oriented (5 to 10 years)

22.3.3. 3. ISSUES AND INITIATIVES What works, what doesn't work, what opportunites lie ahead? Issues: obstacles, circumstances, attitudes that stand in the way of a firm's achieving its vision Initiatives: positive ideas and activities that would proper the firm to its vision Engage w/ third party consultant Written report

22.3.4. Goals in Management Quantifiable, measure targets

22.3.5. Strategies Good Ideas to pish the firm in the righ direction

22.3.6. Action Plans Who is going to do what, and by when?

22.3.7. Implementation and Communications Sharing the plan and keeping in track

23. uyihib


23.1.1. Conducting Research External Resources Industry and general business reports: publications Published data Firm's own survey of marketplace perceptions Internal Resources Employee Survey Interviews with key managers Financial Reports

23.1.2. Analyzing the Findings EXAMINE: Objectively and Dispassionately SWOT: Strengths, Weaknesses, Opportunities, Threats TOP Row: Internal Factors of strength and weaknesses LEFT Column: Positive items. RIGHT Column: Negative items.

23.1.3. Preparing the Strategic Planning Team Provide Results Give homework assignments Obtaining valid input into the planning process


23.2.1. Strategic Planning Team Operations Administrative Size of the Team 6-12 Responsibilities of the Team

23.2.2. Planning Workshop Set up WORKSHOP. "Special" atmosphere to brainstorm Prioritize issues and initiatives to be included in workshop CONCENSUS: Even those with different ideas are convinced by the group's actions


23.3.1. Implementing the Plan Implementing into EVERY DAY's job Consider the champion to be "project manager" with firm leader as "principal-in-charge" for the entire plan Regular meetings Manage established deadlines by using agenda Keep plan active and relevant

23.3.2. Communicating the Plan Involve the entire staff Communicate its highlights to all staff members Share the entire plan Report progress often Use plan as opportunity for open and transparent communication


23.4.1. Talk about it Firm leaders discussion with stakeholders Communication to all staff

23.4.2. The firm leader's role Rally others to share a vision for future Determine how to get there

23.4.3. Updating the plan keep it fresh keep it up-tp-date Keep it relevant