Understanding Business Enterprises: Types, Roles, and Purpose

1. Module 1: Session 3 The Nature and Purpose of Business Enterprises

2. Purpose of the Session Module 1: Session 3 • By the end of the session participants should be able; • To recall the nature, type and purpose of business enterprises • Explain the limited liability company as a preferred vehicle in commercial business such as road construction • Outline statutory and citizenship roles of business enterprises • Discuss the competence and staffing challenge in road construction • Appreciate the need for networking amongst road contractors

3. Nature of a Business Enterprise Module 1: Session 3 • Businesses should; • Have identity • Meet a need at a fee • Mobilize resources • Contract with others e.g. employ • Defend itself • Create a market and a reputation (brand) • Have a strategy for survival and growth

4. Purpose of a business enterprise Module 1: Session 3 Create a customer? Develop goodwill and brand image (prestige)? Make profit? Create employment? Create a legacy? The core and rational purpose of being in business is to increase the owners’ wealth. All other objectives are subsidiary and only a means to attain this purpose.

5. Types of business enterprises Module 1: Session 3 Sole proprietor (Munakukaama and sons) Partnerships (Munaku,Tezifa and partners) Private Company limited by guarantee (no share capital). Private Company limited by shares (members less than 50) Public Company limited by shares (quoted on the stock exchange) Joint ventures for short term, specific assignments.

6. Why a limited liability company is preferred Module 1: Session 3 • Legal person distinct from the owners (the veil) • Legal entity with perpetual succession • Can sue and be sued • Own property and owe • Freely contract per articles and memorandum • Liability of owners limited to unpaid balance on shares • Interest of parties proportionate to shares held • Capital cannot be reduced (unless by Court permission) but may be infinitely expanded • Operations regulated by the company’s act.

7. Statutory roles of a business Module 1: Session 3 • Operate legally as a citizen • For a company, hold annual general meetings and file annual returns to registrar of companies • Pay trade and other licenses • Maintain proper accounting records and prepare audited financial statements • Make tax returns and pay taxes • Register for social security and make contributions • Observe provisions of the employment act, Trade unions act, and occupational health and safety laws

8. Citizenship roles of a business Module 1: Session 3 Make economic use of resources Contribute to national development Create employment Safeguard national resources and the environment Maintain ethical behavior and practices Contribute to welfare of society

9. Competence and staffing Module 1: Session 3 • A business employs others to perform on its behalf • Must build up/retain core competences • Through staffing, must improve performance and continue to learn new skills • Have in house core competences in road construction • Technical e.g. civil engineering, surveying, project management, equipment operation and maintenance etc. • Managerial e.g. corporate and strategic management, finance and accounting, human resource supervision etc.

10. The role of UNABCEC Module 1: Session 3 • Lobbying and advocacy to improve the policy and regulatory environment, • Building capacity for improved competitiveness of NCI, • Catering for professional development of members, • Networking and partnership development, • Fostering regional and international exposure and cooperation, • Affordable access to technical and market information,

11. Role of UNABCEC Module 1: Session 3 • Providing access to UNABCEC web based library services. • Current strategic objectives of the Association include: • Ensuring a supportive NC policy and regulatory framework • Reinvigorating effective membership participation • Growing membership and promoting the Associations’ sustainability and social responsibility.

12. The role of UACE Module 1: Session 3 Uganda Association of Consulting Engineers (UACE) is the leading advocacy body for consulting engineers. Its mission is to develop and promote the consulting engineering industry in Uganda to internationally accepted standards. Represents professional concerns and general business interests for its members, Participates in process of influencing policy in the construction industry,

13. The role of UACE Module 1: Session 3 Keeps in touch with evolving issues in the industry, Keeps in touch with other players, Caters for members’ professional ethics, standards and client-consultation-contractor relationships.

14. Discussion by groups Module 1: Session 3 • State advantages and disadvantages of a limited liability company and why it should be the preferred vehicle. • Identify and discuss the purpose and statutory responsibilities of a business enterprise • Discuss the citizenship responsibilities of any business • Identify the core competences of a road construction business and discuss the barriers to possess them • Explain and Justify the role of UNABCEC and other road contractors associations you are aware of.

15. END Q&A Module 1: Session 3