CIVL202 Construction Engineering I Tutorial 7 T1Mon11:00 – 11:50 T2Wed09:00 – 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