Legal form, products and other information of the company
Discuss about the Planning For Public And Non-Profit Organizations.
The business that is to be proposed is a new foot wear business which has been named as “Global footwear”. The business deals with different kinds of fashionable shoes, accessories and bags with its location in Melbourne region and with the purpose of positioning its business as the top retail store service in the locality (Cassidy 2016). The business intends to achieve 80% market share and achieve a position of one of the store shop dealing with fashionable branded shoes under a single roof. The company’s vision is to offer quality, name branded finished footwear in in different kinds of styles and sizes to put up with different kinds of footwear with updated styles and shapes. The legal form of the business will be a partnership form of business with all its liabilities dealt by three owner with an equal partnership share ratio with a set of management and a set of employees.
In the chosen business “Global footwear” the legal form chosen is partnership type of business that works between at least two people who share the benefits and administration. The government perceives a few kinds of organizations. There are two most common are general and restricted partnerships. The fundamental motive to choose the type of business is to appreciate the assessment treatment (Dawes, Vidiasova and Parkhimovich 2016). A partnership does not need to pay tax on its salary but rather goes through by giving profits to the individual partners. At time of assessment, the partnership must record an expense (Form 1065) that reports its income and losses to the IRS. Furthermore, each partners reports his or her offer of salary and losses on Schedule K-1 of Form 1065. In addition there are different reasons to choose partnership as the authoritative document that incorporates the simplicity in building up the business and start-up cost to meet the liabilities. Sole proprietorship would have an inconvenience for a single proprietor and establishing a company would have ruined the privacy. The controls are absolutely private and constrained to the inside directions. The partnership type of business is adaptable legal form in spite of the fact that it has been picked as the authoritative document at first it can be effortlessly changed if the conditions changes.
- The various financing options for the chosen business and its justification
“Global footwear” in choosing the financing sources needed to break down the finance related aspects of the company and the monetary environment before taking the choices. The financing alternatives are required for the start-up stores, cash inflow for operations and to hang on through the difficult circumstances. Accordingly the association has chosen the following sources to gather fund for the direction and foundation the footwear business that are:
- SBA loan: The SBA means for Small business Associations, these are a typical pattern where the business can fund-raise with the assistance of the little ventures who are prepared to pay to the start-up firms consequently for their development(Christensen, Raynor and McDonald 2016). In spite of the fact that there are different necessities and commitments that are to be followed in this procedure, it is a quicker source of fund and the credit can be long term in nature.
- Crowd funding: There are a few group subsidizing local sites that would enable the Global footwear to raise simple money for a moderately less effort. It is the online process where with the assistance of social networks and media funds can be obtained. Besides this a useful pattern for the new company as this procedure alongside raising the assets can advance the business with the assistance of social media and can set up a brand.
- Factoring: Factoring is the new process of obtaining finance. In this method the business sells its receivables at a discount to get cash up-front (Harrison and Lock 2017). The exchange allows businesses to offer their receivables to dozens of factoring companies at once, along with hedge funds, banks, and other finance companies. These lenders will bid on the invoices, which can be sold in a bundle or one at a time.
- Bank credit: It is an underlying and the essential method to meet the current and the need commitments is to fund-raise from the bank and taking bank advance. The bank advance would likewise help in meeting some long term obligations since it is a partnership type of business and includes just two partners. “Global footwear” can take the help of the bank with the assistance of the credit card to meet the preliminary costs and for the underlying stock accumulative expenses and day to day costs. The credit card would permit to meet the costs consequently of some cost to the bank. It is a simple and a protected procedure of financing.
- Attracting investors: Global footwear would try to attract the investors who are ready to pay for the business in return of some interest. This would help in promoting the business(Chen, Weikart and Williams 2014). There a lot trending online sites where investors and the organisations meet to take part in the business financing sources.
- Raising funds from friends and family: Since the footwear business is a partnership firm of business and only involves three partners, they can easily seek for loans and funds from the friends and relatives. With less interest sum of money can be obtained for meeting the capital requirements. Moreover, it will not need much legal requirements and the source would be a safe option.
Reasons for choosing Partnership as the legal form of the business
Accounting is an act of service which is vital as it gives quantitative data of monetary nature to different partners which is proposed to be utilized as a part of settling on financial choice. These partners incorporate speculators, administration, government, providers, lenders, and controllers and so on (O’connor 2017). Business accounting help in making various short term and long term financial business choices which encourages the venture to develop and also enter in the market. In the matter of Global footwear being show business need to representative accountant is who is a trusted fianacial counsel and business accomplice who gives industry-particular answers for footware organizations. They should have the comprehension of their industry by staying up with the latest on developing business sector patterns and issues. The business needs and the objectives of the organization must achieve to stay productive and the association must set up and keep up bookkeeping arrangements as indicated by the Generally Accepted Accounting Principles (GAAP) ( Leigh and Blakely 2016). Footware industry bookkeepers perform progressed and concentrated accounting assignments that include unpredictable and private industry information. The Accounting business is extremely varied and focused, so footwear industry bookkeepers utilize their inside bits of knowledge to help manage sensitive and narrow profit margins.
The Footwear business is driven by outline advancement, bright items, intense rivalry, trademark identities and well-kept secrets. Footware industry Accountants are not normal CPAs to manage general business and money related exchanges. Rather, they manage limit net revenues, profoundly touchy information and modified items that continually change (Mollick and 2014). Footwear industry accountants will manage deals with clients, buys stock and manufacturers. In this manner the bookkeeping procedure will incorporate the means for making a segment of business accounting framework for progressing costs of doing business and for start-up costs alongside setting up accounting framework for depreciable costs and for the salary that the business would procures. The approaches and systems of the business will accord to the Australian Accounting standard Board (AASB) with is keeping up a different management accounting and financial accounting practices for the business (Gotze, Northcott and Schuster 2016).
The diagram given below is a posting of all records utilized as a part of the general record of an association. The diagram is utilized by the accounting software made by the finanacial data into an monetary statement. The chart is normally arranged all together by account number, to facilitate the undertaking of finding particular records.
Financing sources for Global footwear
The example diagram of records for the Global footware product is as per the following:
The Special journals are can be utilized as a part of the Global footwear for the gathering of the comparable kind of transactions and allows a more prominent division of work and decreases the time for posting (Bryson 2018). If is a transaction cannot be recorded in a special journal it is recorded in the general journal.it saves time and reduces the errors of posting. It also allows division of labour (Suomalainen, Kuusela and Tihinen 2015). When it comes to subsidiary ledgers it is a group of accounts with a common characteristics and facilitates the recording process making the general ledgers free from the details concerning the individual balances. This also helps in reduction of the possibility of the errors of posting and establishes division of labour.
In the chosen business the special journals will be cash receipt journals and the sales journals. The cash receipt journal is the total of the other Accounts column that is not posted. The individual amounts comprising the total are posted separately to the general ledger accounts specified in the Accounts Credited column. And the sales journal separately records the sales that takes place in order to maintain proper management of accounting.
- The various adjustment and closing entries for the business:
The closing periods are very common in accounting departments. Global footwear the closing process of the accounts will take place at least once a year specially during the end of the financial year, and it is the time when the accountants are very busy clearing up issues, conducting reconciliations and correcting errors(Alden 2017). Similarly, the adjustments will be made at that time during the year end while preparing the financial statements. This will avoid confusion and will establish a systematic process of accounting.
Since, the start-up organisation Global footware is a new business and is in the initial process of establishing and investing to accumulate the stocks to develop the business, it will retain the profits at the end of the years there is a need for making new investments (Zietlow, et al., 2018). The considerations for taking the decisions is as follows:
- Financial status of the business: As the Global footwae is a start-up firm the business is in need for accumulation of the finance to meet its obligations.
- General state of economy: The general economic condition is to be considered while making the decision whether to retain or distribute the profit
- Legal, Contractual Constraints and Restrictions: The business must go by the rules and regulations and consider the decision.
- Tax policy: The tax policy is to be taken in hand
- Desire for current income: Global footwear is a start-up firm and is in need for making more investments therefore it must retain the incomes.
- Investor’s uncertainty: Since the business is a partnership firm there is an uncertainty for the investors for the accumulation of the funds. Hence retention must be considered.
References and bibliography
Alden, J., 2017. Planning at a national scale: a new planning framework for the UK. In Revival: The Changing Institutional Landscape of Planning (2001) (pp. 67-94). Routledge.
Bryson, J.M., 2018. Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement. John Wiley & Sons.
Cassidy, A., 2016. A practical guide to information systems strategic planning. CRC press.
Chen, G.G., Weikart, L.A. and Williams, D.W., 2014. Budget tools: Financial methods in the public sector. CQ Press.
Christensen, C.M., Raynor, M.E. and McDonald, R., 2016. What is disruptive Innovation. The Encyclopedia of Human-Computer Interaction, 2.
Dawes, S.S., Vidiasova, L. and Parkhimovich, O., 2016. Planning and designing open government data programs: An ecosystem approach. Government Information Quarterly, 33(1), pp.15-27.
Gotze, U., Northcott, D. and Schuster, P., 2016. INVESTMENT APPRAISAL. SPRINGER-VERLAG BERLIN AN.
Harrison, F. and Lock, D., 2017. Advanced project management: a structured approach. Routledge.
Leigh, N.G. and Blakely, E.J., 2016. Planning local economic development: Theory and practice. Sage Publications.
McLaughlin, T.A., 2016. Streetsmart financial basics for nonprofit managers. John Wiley & Sons.
Mollick, E.R. and Kuppuswamy, V., 2014. After the campaign: Outcomes of crowdfunding.
O’connor, J., 2017. The fiscal crisis of the state. Routledge.
Suomalainen, T., Kuusela, R. and Tihinen, M., 2015. Continuous planning: an important aspect of agile and lean development. International Journal of Agile Systems and Management, 8(2), pp.132-162.
Zietlow, J., Hankin, J.A., Seidner, A. and O’Brien, T., 2018. Financial management for nonprofit organizations: Policies and practices. John Wiley & Sons.
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