V. Organization Plan
The organization plan provides a detailed description of the business in terms of the following:
1. Form of the business organization
2. Liability of the owner or owners
3. Organizational structure
4. Roles and responsibilities
5. Salary requirements
Form of the business organization
A business organization can come in the form of sole proprietorship, a partnership, or a corporation. There must be a purpose for the selection of the most appropriate business form.
The factors affecting the selection of the most appropriate business form include the following:
1. Capital requirement
2. Liability of the owner or owners
3. Management and supervisory skills
4. Tax implications
5. Government intervention
6. Nature of the business
7. External financing requirement
Liability of the Owner or Owners
This section describes the extent of the owner's financial obligations with creditors. The creditors can be in the form of individual persons, suppliers of raw materials and supplies, or financial institutions. The extent of financial liability can either be limited or unlimited.
The term limited liability means that in case of business dissolution and there still remains unsettled financial obligation of the business, the creditor cannot go after the personal property of the business owner. The liability of the owner is only up to the extent of his/her financial contributions to the business. On the other hand, the term unlimited liability means that the creditors can run after the personal property of the owner in the event that the business fails to fully settle its financial obligations during business dissolution.
The extent of liability of the owners in a sole proprietorship and a partnership is usually unlimited. In a corporate form of business organization, the shareholders have limited liability. They are only liable to the extent of their investments in the corporation. The investment of the shareholders is represented through ownership of shares or stocks.
Organizational Structure
The organizational structure of the business is usually shown or reflected in the organizational chart. It shows and defines the hierarchy of the different positions in the organization and the interrelationships of different offices or departments. The organizational chart depicts the flow of communication within the organization, and the line and staff authority that must be observed and executed.
Roles and Responsibilities
The roles and responsibilities of the various positions in the business organization must be clearly defined in order to minimize and avoid misunderstanding and overlapping of functions. The educational requirements and experiences required of the workers must also be specified. Complete information about the expectations of a particular job or position facilitates evaluation and hiring of qualified personnel and the assessment of the performance of existing workforce. Furthermore, a clear set of selection criteria for every position in the organization eases the hiring process and assures the organization that only qualified personnel are hired. It will be better if the entrepreneur prepares early a list of positions together with the respective job specifications.
Salary Requirements
The organizational plan must show the total estimated monthly and annual salary requirements of the business. All other mandatory benefits like the employer's contributions to the Social Security System (SSS), Pag-Ibig, and Philhealth must likewise be specified. If some legal plans and moves of the Congress of the Philippines will bring about increases in the salaries of personnel, the projected amount must be included in the disclosure as well.
1. Form of the business organization
2. Liability of the owner or owners
3. Organizational structure
4. Roles and responsibilities
5. Salary requirements
Form of the business organization
A business organization can come in the form of sole proprietorship, a partnership, or a corporation. There must be a purpose for the selection of the most appropriate business form.
The factors affecting the selection of the most appropriate business form include the following:
1. Capital requirement
2. Liability of the owner or owners
3. Management and supervisory skills
4. Tax implications
5. Government intervention
6. Nature of the business
7. External financing requirement
Liability of the Owner or Owners
This section describes the extent of the owner's financial obligations with creditors. The creditors can be in the form of individual persons, suppliers of raw materials and supplies, or financial institutions. The extent of financial liability can either be limited or unlimited.
The term limited liability means that in case of business dissolution and there still remains unsettled financial obligation of the business, the creditor cannot go after the personal property of the business owner. The liability of the owner is only up to the extent of his/her financial contributions to the business. On the other hand, the term unlimited liability means that the creditors can run after the personal property of the owner in the event that the business fails to fully settle its financial obligations during business dissolution.
The extent of liability of the owners in a sole proprietorship and a partnership is usually unlimited. In a corporate form of business organization, the shareholders have limited liability. They are only liable to the extent of their investments in the corporation. The investment of the shareholders is represented through ownership of shares or stocks.
Organizational Structure
The organizational structure of the business is usually shown or reflected in the organizational chart. It shows and defines the hierarchy of the different positions in the organization and the interrelationships of different offices or departments. The organizational chart depicts the flow of communication within the organization, and the line and staff authority that must be observed and executed.
Roles and Responsibilities
The roles and responsibilities of the various positions in the business organization must be clearly defined in order to minimize and avoid misunderstanding and overlapping of functions. The educational requirements and experiences required of the workers must also be specified. Complete information about the expectations of a particular job or position facilitates evaluation and hiring of qualified personnel and the assessment of the performance of existing workforce. Furthermore, a clear set of selection criteria for every position in the organization eases the hiring process and assures the organization that only qualified personnel are hired. It will be better if the entrepreneur prepares early a list of positions together with the respective job specifications.
Salary Requirements
The organizational plan must show the total estimated monthly and annual salary requirements of the business. All other mandatory benefits like the employer's contributions to the Social Security System (SSS), Pag-Ibig, and Philhealth must likewise be specified. If some legal plans and moves of the Congress of the Philippines will bring about increases in the salaries of personnel, the projected amount must be included in the disclosure as well.
Organization Plan Form of Business Organization Liability of the Owner Organizational Structure Role of the Owner Proposed Salary |