2. 3/19/2003CVEN 349 - Maxwell1 Forms of Organization Presentation: 05-02 March 19, 2003

3. 3/19/2003CVEN 349 - Maxwell2 RAT #05-02-1 Take out a sheet of paper, put your name on it and … Take 2-minutes to list the 4 primary risks assumed by design engineers. Pass papers to the aisles and front.

4. 3/19/2003CVEN 349 - Maxwell3 Purpose: Introduce Students to the various ways to organize to reduce risk exposure.

5. 3/19/2003CVEN 349 - Maxwell4 Learning Objectives: Students should be able to list and/or describe the three basic forms of ownership. Students should be able to sketch and annotate the basic forms of project organization.

6. 3/19/2003CVEN 349 - Maxwell5 Traditional Organization Lack of a contract between A/E and GC causes most of the conflicts. Owner is “caught” in the middle.

7. 3/19/2003CVEN 349 - Maxwell6 Design Build Insulates the Owner but Owner has little control.

8. 3/19/2003CVEN 349 - Maxwell7 Traditional Owner Contractor Owner hires a General Contractor to supervise Subs and Suppliers.

9. 3/19/2003CVEN 349 - Maxwell8 Variation on Traditional Owner hires a CM to advise him in managing Subs.

10. 3/19/2003CVEN 349 - Maxwell9 Owner hires a CM to Run the Construction

11. 3/19/2003CVEN 349 - Maxwell10 New Methods will require New Organizations. How would you Organize this? Traditional? Design Build? Partnering?

12. 3/19/2003CVEN 349 - Maxwell11 PAT #5.2.1 Take out a sheet of paper and … Individually, take 1 minute to Sketch a Design/Build project organization. As Pairs, take 2-minutes to compare and discuss. As Teams, take 2 minutes to discuss why you might use this in a “fast tracked” project.

13. 3/19/2003CVEN 349 - Maxwell12 Three Basic Forms of Ownership Proprietorship – An Extension of a Person and terminates with that person. Partnership – Several Persons but terminates with the Death of a Single Partner. General Partnership – Everyone is Involved Limited Partnership with Managing General Partner Corporation – A Legal Person with Indefinite Life, with owners having Limited Liability

14. 3/19/2003CVEN 349 - Maxwell13 Corporations may be: Publicly Traded – Stock Exchange Closely Held – Usually a Family Sub Chapter S – Usually Family Members or Circle of Friends and Associates. I think that the Texas Professional Corporations are treated as Sub Chapter S’s. REIT – Real Estate Investment Trust Joint Ventures

15. 3/19/2003CVEN 349 - Maxwell14 What you have to consider when you pick an ownership form. Taxation Issues Risk and Liability Issues Capital formation Continuity of Organization Administrative Flexibility Legal Restrictions

16. Taken from Halpin Chapter 5.

17. 3/19/2003CVEN 349 - Maxwell16 PAT #5.2.2 Take out a piece of paper and… Individually, list the three forms of ownership and which one would your use to start a micro brewery. As Pairs, take 2-minutes to discuss your solution. Turn in your individual answers.

18. 3/19/2003CVEN 349 - Maxwell17 Class Assessment: Please take 1-minute to write down the “muddiest” topic in this lecture. Turn in your submission.