Abstract
A business is a well-structured approach that provides end users with goods and services they want. The word business also means an organization that provides these goods and services. In this paper, the latter case is of main concern. The government charter that accords them the privilege to borrow and lend money, sue and be sued, and buy and sell properties creates businesses. There are various forms of businesses like the sole proprietorship, partnership and limited liability companies.
The sole reason as to why firms engage in business activity is to make profit; however, we cannot avoid stating that there are nonprofit making organizations. Before forming a business venture, the owners must seek for pieces of advice on the organization type, name, management structure and the role of the stakeholders. Herein, “Dave’s Cave”, is a proposed business venture which is to be owned by three personalities as its trustees. It is expected that some of their friends would also vest their interests in “Dave’s Cave”. I would, in this case, advise the founders (Notla, D’ablo, and Childwall) as discussed herein.
Business Legal Organisation Type
In the initial stages of the organization’s development, it will be a private international company limited by guarantee. The organization will not have shares during this period and Notla, D’ablo, and Childwall will be guarantors rather than shareholders. The business is expected to operate in England and France so it must be an international company. Again, the three members’ liabilities will be limited to the £10000 and the £30000 guarantee they have agreed to contribute. As the business expands, they will decide to have shares and eventually change the organization to a public limited company. This will allow the other people to have shares and equally have a say in the organization. This will also enable them to employ directors to run the business on their behalf in any case the founders have other commitments or have aged out.
The choice for the this organization type is due to the fact that Abby Childwall already acts as a director of a company of a similar venture to this so a partnership would be out of question. There are three people coming up with a business idea therefore this automatically blocks out sole proprietorship as an organization type.
The Company Organization Structure
Name and brief description of the company
The company’s name will be formally “Dave’s Cave International Limited Company” jointly owned by Notla, D’ablo, and Childwall as the founders. The company will have its head office in Albert Dock, Liverpool and the other office in Amiens (France). The company deals in sales of arts and crafts at various Fairs and Community Events. The company will operate with this name only if approved by the Registrar of Companies at Companies House. A change in name may be necessary if the approval fails or if there exists a company with a similar name.
Board of Directors
During the initial stages, David Notla will act as the director and will discharge his duties as is impliedly expressed by the law of companies. At this stage, I would propose Cote D’ablo as the company’s secretary while Abby Childwall becomes the person in charge of sales and warehousing. Abby Childwall, will double up as the personnel manager in charge of salesmen and representatives recruitment. Given that Cote D’ablo is a barrister, he is conversant with business law and such matters that appertain to legal affairs. Again, David Notla wants to defend his position in the board, so he would serve well as a director. However, it is expected that when the organization picks up and expands, there shall be structural organization where the board of director shall change and the number shareholders shall increase.
Business Organization Registration
The organization shall be registered as a companies at the Companies House after the approval of its name by the Registrar of Companies. The following shall be the requirements:
Article of Organization
The name of the company shall officially be “Dave’s Cave International Limited Company”. Its members are:
Name Designation Address
David Notla Director
Cote D’ablo Company secretary
Abby Childwall Personnel Manager
The business shall be located in Albert Dock, Liverpool and the other office in Amiens (France).
Operating Agreement
General
“Dave’s Cave international limited company” shall be governed by the UK state business law and shall deal in sales of arts and crafts at various Fairs and Community Events in England and France. The company shall operate perpetually unless dissolved by an agreement by members or a court order. “Dave’s Cave international limited company” shall be initially member-managed, by the three founder members but later it shall be manager-managed. However, this shall only depend on the prosperity of the organization. The organization shall issue its shares to the public upon which there shall be a change in the management structure. The shareholders will be the former friends whose liabilities shall be limited by their shares. This agreement shall be amended to that effect in a meeting attended by the three founders and the shareholders. Any dispute between members shall be settled in a meeting attended by two thirds of the members.
Capital Contribution
The initial capital will be raised by the three members (Notla, D’ablo, and Childwall), which in this case, is £10000 and the £30000 guarantee they have agreed to contribute. Any other capital will be raised by the other legal friends. This will purely be through buying the company’s shares. The shareholders’ liability shall be limited to the shares. No member shall have any priority over the others and the financial distribution shall be equitable. All the members shall be allowed to withdraw their share capital equivalent to their initial capital contribution.
Financial Distributions
Financial distribution will be in pro rata basis as well as the tax allocations. All the members shall be entitled to 20% reimbursement.
Management
At the initial stages, the founders shall be the managers. After the issuance of the shares to the public, all the members will decide the composition of the management team. However, any founder member that will show any interest in the organization’s management shall be given priority over the others. All the members are entitled to be in the management position unless barred by other commitments or declines voluntarily. If any member incur expenses in exercising his duties as prescribed in the agreement the organization shall fully indemnify. However, the members shall be fully responsible and liable for any act or omission by him/her.
Record Keeping
The organization records shall be held in the branch offices in Amiens (France) and in Liverpool. The powers to keep records lie with the directors and mainly handled by the company secretary.
Voting Rights
Decision-making will be through voting, and decision shall be made by the majority. Each member shall have one vote and two thirds of the members must be present before any voting exercise can begin. However, in executing his/her prescribed duty a member may proceed without consulting any member unless his action may overlap his/her area of jurisdiction.
Meetings
There will be an annual general meeting (AGM) at the end of every financial year. This is where the organization’s progress is discussed. In addition, the financial statements for the ending fiscal year are presented here by the company secretary, after which there shall be the discussion of possible ways forward. The meetings shall be held in Liverpool and the members will be given the notice as such through memos, telephone texts and calls and in a notice in the public newspapers. The quorum to start the meetings will be three quarters of all the members. Interim meetings may also be called whenever a need may arise. The annual general meetings shall always be held after the board members meeting.
Assignment and Transferability of Interest
Any member is allowed to sell, assign or otherwise transfer his interest to another person of his choice and the new person shall have a right to the extent of the shares transferred. However, in doing this the member must seek the consent of all the other members in a general meeting. The assignment, sale and or transfer may be prohibited in the event when the organization is on a crisis or the member carried out any misconduct pending investigation. In the event of death a member will be replaced by the person mentioned in his will or otherwise his next of kin. Any person as will be decided by members in a general meeting will replace any incompetent member. The members’ decision will also be considered in member’s separation or termination.
Withdrawal
A member can voluntarily withdraw from the organization only with the members’ consent if he does not have any case of investigation in the organization. A member may be involuntarily removed from the organization in case of incompetence or any act that is detrimental to the organization’s dealings. After withdrawal, the member ceases to hold any interest in the company.
Dissolution
The company is expected to operate indefinitely but may be dissolved by a court order or by request by members. In addition, the members may decide to shift to another venture which must get all the members approval in a meeting attended by three quarters of the members.
Form IN01
Submit a form that contains the details of the shareholders, directors and the amount of share capital and the details of the company promoter.
Publication of Notice of Intent to Form the company
Publish in one of the public newspaper the intention to form the company. The registration of “Dave’s Cave international limited company” can then be done online or the company’s secretary may go in person to the Companies house to finalise the registration process.
Licenses or Permits
The company’s house will issue “Dave’s Cave international limited company” with a trading permit where then the company can start its operation.
Many governments worldwide are failing to coordinate in the near future. This would result into an increased uncoordinated and conflicting regulation. For a company like “Dave’s Cave international limited company” which wants to go international, it would affect its operation across the borders. Therefore I would advise the managers to study the regulations and plan a head of their occurrences.
Credit Crunch
The company may experience a reduced general availability of loans from financing institutions or the tightening of the regulations and conditions for acquiring loans from banks. This reduction in availability of credits may also be accompanied by either an increase in interest rates or unclear rates of interest. This risk is better dealt with using the following strategies:
Access to equity capital by the company
Having a strong balance sheet
Capital oriented business plan
Radical Greening
“Dave’s Cave international limited company” should be aware that the hazards of potential climate change might actually be more imminent than is commonly understood. Climate changes
Managing Talents
Getting qualified managers is a global problem and a young company like Dave’s Cave may fail to get talented managers who are conversant with both local and international management skills. In addition, there would be a serious challenge when selecting sales personnel. These kinds of risks may be mitigated through partnership with to fund students and posts, providing job placements and supporting joint project work.
Emerging Markets
By going international Dave’s cave is likely to face competition and as a result may end up concentrating in only one country. This is because acquiring a market share is easier for an emerging company than a mature one.
Promoting Dave’s Cave
If I were to promote this company I would use the following strategies to publicize it.
1) Using every outgoing piece of paper, and every electronic document as company promotion.
Apart from using my business card for promotion, I would ensure that the company’s name logo, contacts and memorable slogans appear on envelopes as well as my letterheads. The company phone and fax number would be there too. The same goes for outgoing faxes, bill payments and receipts. In addition, I would use electronic mails to inform the public of the company’s existence and I will use articles and press releases.
2) Writing articles on topics related to recycled materials as an excellent company promotion technique.
In writing articles related to recycling of materials, I would include a short biographical note or a blurb about me and Dave’s Cave to go out with the article. Then send it out to a publication that accepts unsolicited work from unknown authors. I would also post my articles on the local newspapers.
3) Sending out press releases.
My press releases will contain engaging pieces of information that captures people’s interests. The release shall contain information such as recent expansion of the company, introduction of a new product in the market, involvement of the company in sponsoring charity events and or any recently won awards. These would appear on the local and international newspapers as well as in the internet in sites like mine.
4) Spending some of my online time on company promotion.
As a frequenter of going online I would spend some of my time to post online messages to forums as a way of promoting Dave’s Cave Company.
5) Using buddy marketing to promote the company.
Establishing a relationship with other companies is also another way of promoting Dave’s Cave Company. In sending out a brochure I would include a business card of that company which has agreed to do so for my company. Another way is partnering with a complimentary company to do the same.
6) Giving out freebies as company promotion.
Offering a free gift to the first 1000 people to visit the stores of Dave’s Cave is another way of promoting the company.
7) Promoting the business on a talk show.
Visiting the local radio station and cable TVs as guest speaker would also increase my potential of outreaching as many people as possible.
Works Cited
Adams, Alix. Essentials of Business Law 2nd Ed. Pearson Longman, 2010
Keenan, D. and Riches, S. Business Law, 9th Ed. Pearson Longman, 2009
Macintyre, Ewan. Business Law, 5th Ed. Harlow, Pearson Longman, 2010
MacIntyre, Ewan. Essentials in Business Law 2nd Ed. Pearson Longman, 2009
Nairns, J. Employment Law for Business Students, 3rd Ed. Longman, 2007
