CIVL202Construction Engineering ITutorial 7

T1 Mon 11:00 – 11:50

T2 Wed 09:00 – 09:50

Tutorial Outline

Corporation Subchapter Corporation Pros and Cons of Corporation Project Planning Developing WBS

Corporation

Legal entity and is created as such the law of a state in which it is chartered

If corporation owned by three persons, A(40%), B(30%) and C(30%), assume each share of a corporation has a par value of one dollar.

Initial capital = $100,000 Book value of each share = $100/share Market value = a value that is listed on stock

exchanges for those publicly traded corporation shares and that is printed on newspapers

Corporation

A lawyer is normally retained to prepare the proper documents

The corporation can sell the stock to raise capital, but this power can be and has been abused

Suitable for high-risk business because of its limitation of liability, such as construction industry

Only the assets of the corporation are subjected to attachment of in the settling of claims against and losses incurred by the corporation

Double taxation : the same profit that is taxed again when it is distributed to stockholders as a dividend

Subchapter Corporation

avoids double-taxation feature of a normal corporation but retains the protection of limited liability

the principals are taxed only once as personal income

Pros and Cons of Corporation Pros:

generation of additional capital by distributing ownership

it has a continuity that is independent of the stockholders

allows the closed nature of a closely held corporation to be maintained

Cons: reduced level of control exercised in management

decision making and certain restriction that can be placed on the corporation when operating outside of its state of incorporation

when a corporation operates in a state other than the one in which it is incorporated, it is referred to as a foreign corporation

Project Planning

Work package: the scope of work is broken into components which define work elements or building blocks which need to be accomplished in order to realize the end objective. The sub-elements are often referred to as work packages

Work breakdown structure: hierarchical format that summarizes all work packages of a project

Planning = work breakdown + work sequencing Develops a framework for project execution,

monitoring and control Minimizes uncertainty, clarifies sub-objectives,

helps avoid crisis management

Developing WBS

Work packages must be clearly distinguishable from other work packages

Each work package much have unique starting and ending dates

Each work package should have its own unique budget

Work packages should be small enough that precise measurement of work progress is possible

Definition of work package can be facilitated by: location or area within project material type method of placement organizational resources required