Organizational Plan – is the section of the business plan that identifies the form of

ownership the business venture will take. It provides a background of the management
team; describes the organizational structure, including the management team’s roles,
responsibilities, and reporting relationships; outlines the planning, decision-making,
monitoring, and evaluation processes; and spells out the role of the board of advisers,
among others.

FORMS OF OWNERSHIP

1. Sole Proprietorship – this is generally the simplest way to set up a business. It

is owned by a single individual who is singly responsible for running the
business and is accountable for all debts and obligations related to the business.
2. Partnership – It is an agreement in which two or more persons combine their
resources in a business with a view of making profit. A partnership agreement is
drawn up and profits are divided among the partners according to the terms of
agreement.
a. General partnership – All owners share the management of the business and
each is personally responsible for and must assume the consequences of the
actions of the other partners. All general partners have unlimited liability
which means loan payments will extend to their personal property.
b. Limited partnership – Some members are general partners who control and
manage the business and may be entitled to a greater share of the profit
while other partners are limited and contribute only capital, take no part in
control or management, and are liable for debts to a specific extent only.
3. Corporation – It is a legal entity that is separate from its owners, the
shareholder. No shareholder is personally liable for the debts, obligations, or acts
of the corporation. Directors and officers can bear liability for their involvement
with the corporation. The legal entity of the corporation gives it an individual
identity of its own. Corporations normally can exist for a life of 50 years, which is
renewable for another 50 years. Owners have limited liabilities. However,
corporations are burdened by heavy taxes.

Organizational Structure – this section of the organizational plan will show the reader
of the business plan who the principal owners of the business are, who constitutes the
management team, and who provides valuable advice to the business owners and/or
management team.