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Old notes CE 531 ( Civil Engineering Management)
Business ownership
There are two(2) types of Businesses
1. Unincorporated Business
2. Corporate Business
Unincorporated: There are two(2) types.
A .Sole proprietorship ie own by one person and operated for his profit. It is a sole
ownership company. He sets up the business.
Advantages
1. Simplicity in starting the business.
2. It has low cost of organization
3. He owns all the profit and does things the way he likes.
4. He has all the freedom either to close down or to improve. There is a promptness
of action. He makes the decision without contacting anybody.
5. Personal incentives ie involvement. He gets personal satisfaction to see that the
company grows.
6. Credits standy: it can be advantage as well as disadvantage. Credit standy ie
non-business wealth. In taking loan, he pledges his non- business wealth.
7. Trade information are not disclosed to any body.
8. He can close down the business at any time ie it is simple to dissolve.
Disadvantages
1. Unlimited liability ie the credit standy.
2. It is usually small scale industries.
3. There is a difficulty of management since he does it alone.
4. There is lack of continuity ie when the owner dies, the business suffers. When in
prison or when sick, there is problem in the business. On bankruptcy, the
business is closed.
5. The staff under him are servant- master relationship
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B. Partnership : This is the second type of unincorporated business
organization/ownership.
When two or more individuals agree to combine their financial, managerial and technical
abilities for the purpose of operating a business for profit. It is very important that you
have a written agreement even if not taken to the ministry. The agreement will show the
responsibilities, rights and authorities of the individuals running the business.
Advantages
1. It is simple to start the business. They do not go to the ministry of trade. They
only go to a lawyer who drafts the agreement for them. Consideration in law is
the interest one gets when money is given for a business.
2. Pulling of funds ie larger capital.
3. Credit standy is as in the sole ownership.
4. Combine efforts in managements and decision making and talents are involved
in the running of the business/company.
5. There is no servant- master relationship and the employees are more
comfortable.
6. There is personal commitment to the business.
7. There is a definite legal status of the business.
Disadvantages
1. The credit standy: The liability is unlimited and hence non-business wealth is
pledge on taking loans.
2. The partnership is dissolved on the death and withdrawal of a partner. Ie lack of
continuity on the death and withdrawal of a partner.
3. The control is not as easy as in sole ownership ie there are many people
managing.
4. The investment in the business cannot be easily withdrawn.
5. There is problem of size. It is a small business that have partners.
There are many types of it.
1. General partnership. All partners have unlimited liability for the company’s death.
2. Limited partnership. Here at least one is general and others are limited. There
are many type of partners ie the general partner who is active in management
because he has unlimited liability.
A secret partner: this is a partner but his identity is not disclosed. He is also an
active partner.
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Dormant partner: he is not active in management ie he is just the same as the
secret partner.
Limited partner: here the liability is limited to the amount invested.
The co-operatives
This is an organization formed to benefit its owners in form of reduced prizes and
or the sharing of surpluses at the end of the year.
There are some types of co-operatives
1. Consumer co-operatives: they sell goods to members and to the public.
2. Financial co-operatives: eg banks and credit unions.
3. Insurance co-operatives
4. Marketing co-operatives: those that come together to manufacture eg the
farmers.
5. Service co-operatives: here members are provided with services.
Characteristics
Each member is entitle to one vote irrespective of his share in the company. Here
membership is not limited. It is open and the larger the members, the better. The prize
does not appreciate at any time. It is the same all over. Any member can leave at any
time. Co-operative system is plane with poor management.
Incorporated companies
Incorporation is a legal entity and requires a form from the government. It is a body that
may have perpetual life. Many people unite into one and it does not change. Its identity
with change in ownership ie people come and go. Eg UAC etc.
Corporate structure
It has a charter from the government which will include the articles of incorporation, the
type and number of shares to be issued, no of directors and location of the company’s
operations eg Okeke and sons Ltd or Okeke and sons inc. this is to show to the
customers and suppliers that the owners have limited liabilities for company’s death.
The owners of the business are called the share holders. It has a number of share
which people buy. There are also board of directors who are elected at the annual
general meeting of the company. The directors may not be share holders. Board of
directors make policies for the company. The board of directors appoint the
management. The managers see to the day to day activities of the company. A
manager who is a member of the board of directors and also owns share in the
company is a managing director. The corporate structure is to separate management
from the ownership.
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Advantages
1. Limited liability ie share holders only risk the amount invested. Their non-
business wealth is not involved.
2. The financial capability is large.
3. The ownership can change without changing the identity of the company.
4. It has a perpetual life.
5. It has an efficient management.
6. It can expand easily and hence have an international recognition.
7. It is a legal entity and can be sued just as an individual.
Disadvantages
1. The organizational expenses are very large and at times there is no profit.
2. There are government restrictions.
3. There is lack of personal interest, non personal commitments especially in
developing countries.
4. Lack of secrecy
5. The credit is limited to the liability. There also charter restrictions ie restrictions
incorporated in the charter.
There are many types:
1. Government co-operatives: These can be government departments responsible
for administrative, supervisory and regulatory government services or can be an
agency which is just like government co- operation ie the parastatals.
2. The business co-operations: Here there are private and public business co
operations.
The private: The stock cannot be traded on the open market and the number of
shareholders can be limited by law.
The public: Here there is no restriction in the business and transfer of shares. The
shares are traded in the open. There are other types.
1. Joint venture or the syndicate: This is a temporary partnership set up for a
specific purpose and the venture ends when the purpose is accomplished and
the partnership is terminated. We have the business trustee.
2. Trustees: These are people trusted to act on behalf of somebody. Eg unions can
have trustees who can act.
3. Mutual company: This is owned by user members. The members use the
services of the company.
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4. Holding company: This is a company that has an enough of shares of other
companies and controls it.
5. Conglomerate: it’s a company which controls a no of firms in unrelated fields eg
the ITT.

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Old notes CE 531 ( Civil Engineering Management) Business ownership There are two(2) types of Businesses 1. Unincorporated Business 2. Corporate Business Unincorporated: There are two(2) types. A .Sole proprietorship ie own by one person and operated for his profit. It is a sole ownership company. He sets up the business. Advantages 1. 2. 3. 4. 5. 6. 7. 8. Simplicity in starting the business. It has low cost of organization He owns all the profit and does things the way he likes. He has all the freedom either to close down or to improve. There is a promptness of action. He makes the decision without contacting anybody. Personal incentives ie involvement. He gets personal satisfaction to see that the company grows. Credits standy: it can be advantage as well as disadvantage. Credit standy ie non-business wealth. In taking loan, he pledges his non- business wealth. Trade information are not disclosed to any body. He can close down the business at any time ie it is simple to dissolve. Disadvantages 1. 2. 3. 4. Unlimited liability ie the credit standy. It is usually small scale industries. There is a difficulty of management since he does it alone. There is lack of continuity ie when the owner dies, the business suffers. When in prison or when sick, there is problem in the business. On bankruptcy, the business is closed. 5. The staff under him are servant- master relationship B. Partnership : This is the second type of unincorporated business organization/ownership. When two or more individuals agree to combine their financial, managerial and technical abilities for the purpose of operating a business for profit. It is very important that you have a written agreement even if not taken to the ministry. The agreement will show the responsibilities, rights and authorities of the individuals running the business. Advantages 1. It is simple to start the business. They do not go to the ministry of trade. They only go to a lawyer who drafts the agreement for them. Consideration in law is the interest one gets when money is given for a business. 2. Pulling of funds ie larger capital. 3. Credit standy is as in the sole ownership. 4. Combine efforts in managements and decision making and talents are involved in the running of the business/company. 5. There is no servant- master relationship and the employees are more comfortable. 6. There is personal commitment to the business. 7. There is a definite legal status of the business. Disadvantages 1. The credit standy: The liability is unlimited and hence non-business wealth is pledge on taking loans. 2. The partnership is dissolved on the death and withdrawal of a partner. Ie lack of continuity on the death and withdrawal of a partner. 3. The control is not as easy as in sole ownership ie there are many people managing. 4. The investment in the business cannot be easily withdrawn. 5. There is problem of size. It is a small business that have partners. There are many types of it. 1. General partnership. All partners have unlimited liability for the company’s death. 2. Limited partnership. Here at least one is general and others are limited. There are many type of partners ie the general partner who is active in management because he has unlimited liability. A secret partner: this is a partner but his identity is not disclosed. He is also an active partner. Dormant partner: he is not active in management ie he is just the same as the secret partner. Limited partner: here the liability is limited to the amount invested. The co-operatives This is an organization formed to benefit its owners in form of reduced prizes and or the sharing of surpluses at the end of the year. There are some types of co-operatives 1. Consumer co-operatives: they sell goods to members and to the public. 2. Financial co-operatives: eg banks and credit unions. 3. Insurance co-operatives 4. Marketing co-operatives: those that come together to manufacture eg the farmers. 5. Service co-operatives: here members are provided with services. Characteristics Each member is entitle to one vote irrespective of his share in the company. Here membership is not limited. It is open and the larger the members, the better. The prize does not appreciate at any time. It is the same all over. Any member can leave at any time. Co-operative system is plane with poor management. Incorporated companies Incorporation is a legal entity and requires a form from the government. It is a body that may have perpetual life. Many people unite into one and it does not change. Its identity with change in ownership ie people come and go. Eg UAC etc. Corporate structure It has a charter from the government which will include the articles of incorporation, the type and number of shares to be issued, no of directors and location of the company’s operations eg Okeke and sons Ltd or Okeke and sons inc. this is to show to the customers and suppliers that the owners have limited liabilities for company’s death. The owners of the business are called the share holders. It has a number of share which people buy. There are also board of directors who are elected at the annual general meeting of the company. The directors may not be share holders. Board of directors make policies for the company. The board of directors appoint the management. The managers see to the day to day activities of the company. A manager who is a member of the board of directors and also owns share in the company is a managing director. The corporate structure is to separate management from the ownership. Advantages 1. Limited liability ie share holders only risk the amount invested. Their nonbusiness wealth is not involved. 2. The financial capability is large. 3. The ownership can change without changing the identity of the company. 4. It has a perpetual life. 5. It has an efficient management. 6. It can expand easily and hence have an international recognition. 7. It is a legal entity and can be sued just as an individual. Disadvantages 1. The organizational expenses are very large and at times there is no profit. 2. There are government restrictions. 3. There is lack of personal interest, non personal commitments especially in developing countries. 4. Lack of secrecy 5. The credit is limited to the liability. There also charter restrictions ie restrictions incorporated in the charter. There are many types: 1. Government co-operatives: These can be government departments responsible for administrative, supervisory and regulatory government services or can be an agency which is just like government co- operation ie the parastatals. 2. The business co-operations: Here there are private and public business co operations. The private: The stock cannot be traded on the open market and the number of shareholders can be limited by law. The public: Here there is no restriction in the business and transfer of shares. The shares are traded in the open. There are other types. 1. Joint venture or the syndicate: This is a temporary partnership set up for a specific purpose and the venture ends when the purpose is accomplished and the partnership is terminated. We have the business trustee. 2. Trustees: These are people trusted to act on behalf of somebody. Eg unions can have trustees who can act. 3. Mutual company: This is owned by user members. The members use the services of the company. 4. Holding company: This is a company that has an enough of shares of other companies and controls it. 5. Conglomerate: it’s a company which controls a no of firms in unrelated fields eg the ITT. Name: Description: ...
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