Chapter 5
Management Study

5.1 Form of Business Ownership 5.1 Form of business ownership Ms. Katrina Cassandra D. Espeleta and Ms. Roanna Kelly L. Gabinete formed a partnership and created the company Cats and Rocks, the company that will be producing and supplying Lay-Backpack. A partnership is commonly formed where two or more people wish to come to together to form a business it provides moral support and will allow for more creative brainstorming. The owners chose this type of ownership because with more than one owner, the ability to raise funds may be increased, both because two or more partners are able to contribute more funds. In a partnership the company can benefit from the combination of complementary skills of the owners and could be cost-efficient as each partner can specialize in a certain aspect of the business.

5.2 Capitalization The amount to be generated for the beginning capital of the business each of the proponents from Cats and Rocks will invest twenty thousand pesos (Php 20,000.00) for a total of forty thousand pesos (Php 40,000.00). The twenty thousand pesos that the proprietors plan on investing that will serve as the start up capital for Cats and Rocks will come from their own savings. Katrina Cassandra D. Espeleta | Php 150,000.00 | Roanna Kelly L. Gabinete | Php 150,000.00 | TOTAL | Php 300,000 | *Tabular representation of the initial investments of each partner

5.3 Organizational Structure

Owner
Owner

Cutters and Trimmers
Assembly Team
Quality Control
Fabric Sewers

The two general partners will be in charge of the whole enterprise. One will manage the administration and the other will handle the production care. Though the production manager is under the administrative manager, they both have equal rights towards the company’s ownership since they have invested an equal share of the capital.
Under the administrative manager, there are three sections: financial department, marketing and promotions department, and production department. The production department is the main manufacturing section of the enterprise. Quality control, cutting, and sewing are all under this. 5.4 Manpower Requirements According to the Philippine Labor Code, the allowable age for a person to work is at least 15 years old. For formal reasons, the company will be hiring people from the age 18 or above for a more mature workplace setting. If ever there are cases that a skill needed in the manufacturing area is from someone in the below 15, this person must get a permit from the Department of Labor and Employment (DOLE).
Employees in the production area (sewing, cutting, trimming, and assembly) must be a high school graduate with at least 1 year working experience in the area of garments and fabrics. Production employees must be capable of all processes to be able to perform the job rotation properly and efficiently.

5.5 Compensation The Lay-Backpack by Cats & Rocks company will have economic contributions by having the employers and employees benefit from the SSS, Philhealth, and 13th month pay.

Table 5.5.1- SSS Contribution POSITION | SALARY BASE | EMPLOYER SHARE | EMPLOYEE SHARE | TOTAL MONTHLY CONTRIBUTION | Sewer | 6,740.00 | Php 404.30 | Php 216.70 | Php 621.00 | Cutter | 6,740.00 | Php 404.30 | Php 216.70 | Php 621.00 | Assembly Personnel | 6,740.00 | Php 404.30 | Php 216.70 | Php 621.00 | Assembly Personnel | 6,740.00 | Php 404.30 | Php 216.70 | Php 621.00 | Quality Control Personnel | 6,740.00 | Php 404.30 | Php 216.70 | Php 621.00 | TOTAL: | 33,700.00 | Php 2,021.50 | Php 1,083.50 | 1,872.00 |

Table 5.5.2- PhilHealth Contribution POSITION | SALARY BASE | EMPLOYER SHARE | EMPLOYEE SHARE | TOTAL MONTHLY CONTRIBUTION | Sewer | Php 6,740.00 | Php 75.00 | Php 75.00 | Php 150.00 | Cutter | Php 6,740.00 | Php 75.00 | Php 75.00 | Php 150.00 | Assembly Team | Php 6,740.00 | Php 75.00 | Php 75.00 | Php 150.00 | Assembly Team | Php 6,740.00 | Php 75.00 | Php 75.00 | Php 150.00 | Quality Control Personnel | Php 6,740.00 | Php 75.00 | Php 75.00 | Php 150.00 | TOTAL: | Php 33,700 | Php 375.00 | Php 375.00 | Php 750.00 |

Table 5.5.3 – 13th Month Pay Position | Monthly Salary | 13th Month Pay | Sewer | Php 6,740.00 | Php 6,740.00 | Cutter | Php 6,740.00 | Php 6,740.00 | Assembly Personnel | Php 6,740.00 | Php 6,740.00 | Assembly Personnel | Php 6,740.00 | Php 6,740.00 | Quality Control Personnel | Php 6,740.00 | Php 6,740.00 | Total | Php 33,700 | Php 33,700 |

5.6 Organizational Policies Proper ethics in the workplace must be implemented for a productive formal setting of job performance. Each employee must comply to the policies: 1. Identification card (ID) must be worn at all times inside the workplace for uniformity purposes. 2. Before working, all equipments, materials, machines, and other tools must be complete and properly checked if functional. 3. No unnecessary conversations during production time. 4. All materials and properties of the company must not be brought outside of the office/manufacturing plant unless with the consent of the production manager. 5. Employees are not allowed to bring pets inside the office/manufacturing plant to avoid distractions and to keep the place clean and safe. 6. Employees are not allowed to smoke inside the office. There will be given two meal breaks for all employees. 7. As much as possible, answering personal calls must be avoided in the middle of the hours of work. 8. There are 3 allowable leaves for each employee. These must be used productively to avoid penalties.
The proper sanctions will be followed:
*Tabular representation of the consequences from absences Days of leave in a month | Consequence/Penalty | 4 days | Counselling | 7 days | Notice | 18 days and above | Termination |

Any member of the company who has acquire the maximum amount of absences by sickness will be then referred to the company’s endorsed doctor, whether the employee shall be terminated in accordance to the provision of the Labor Code of the Philippines. *Tabular representation of the consequences from tardiness No. Of Times Tardiness in a month | No. Of Offenses | Consequence/Penalty | 6 tardy | 1st offense | Counselling | 12 tardy | 2nd offense | Memo | 18 tardy | 3rd offense | Termination | If unexpected situations happen to employees such as sickness, family emergency, and such, it’s the time that under time shall be considered.
5.7 Legal Requirements Requirements | Price | Business Permit | Php 2,000.00 | Business Permit Registration | Php 200.00 | Partnership Registration | Php 3,000.00 | Barangay Clearance | Php 350.00 | Mayor’s Permit | Php 4,274.00 | Tax Certificate | Php 500.00 | SEC | Php 3,000 | Special book of accounts | Php 400.00 | Tax registration at BIR | Php 615.00 | Receipt Printing | Php 3,000.00 | Total | Php 7,700.00 |

Before building a new business, all forms of businesses undergo through legal process that demands for legal requirements. These requirements are the necessary permits and contracts in order for the company to operate legally. 1. Secure Business Name with Securities and Exchange Commission (SEC)
Register your preferred corporate name with the SEC while the lawyers work on the company's articles of incorporation and by-laws. Applicants should list at least five (5) company names. 2. Open Corporate Bank Account
Companies applying for incorporation must open a TITF account with its preferred bank. The TITF account will serve as the temporary depository account of the required paid-up capital of the business. 3. Securities and Exchange Commission (SEC) Registration
Provide the following documentary requirements are complete, the application for registration may be submitted to the SEC: * Name Reservation and Payment Form * Notarized Articles of Incorporation and By-laws * Treasurer's Affidavit * Bank Certificate of Deposit or Proof of Inward Remittance * Duly accomplished SEC Form F-100, for corporations with more than 40% foreign equity
SEC registration takes 10 to 15 working days upon submission of complete documentary requirements and if there are no holidays during this time period. 4. Bureau of Internal Revenue (BIR)
Registration, After SEC registration, a company must obtain a taxpayer identification number (TIN), register its books of accounts and apply for authority to print official receipts. 5. Social Security System
All companies must be registered with the SSS and must secure an employer number which will be used as reference for the remittance of monthly contributions. To register with the SSS, the following documents have to be submitted: * Employer Registration Form (R-1) * Employment Report Form (R-1A) * SEC Registration, Articles of Incorporation and By-laws 6. Phil-Health Registration
Phil-Health is the Philippine Health Insurance Corporation. All employers are required to register their employees to this agency as stated in the New National Health Insurance Act (RA 7875 / RA 9241). PhilHealth manages and administers the government health care system. To register with PhilHealth, the following documents are required: * Employer Data Record (ER1) * Report of employee-members (ER2) * SEC Registration, Articles of Incorporation and By-laws 7. Pag-Ibig Registration
Pag-IBIG Fund is also known as The Home Development Mutual Fund, which is mandatory for all employees covered by the Social Security System (SSS). The Pag-IBIG Fund essentially provides various types of loans. 8. Mayor’s Permit/ Business Permit
Clearance is obtained from the Barangay where the business/company is located. The fees depend on the Company's paid-up capital plus an additional amount for taxes, fees and other charges which may vary for each barangay. The basic document required is the notarized lease contract between the Company and the Lessor of its registered office. 9. Business Permit/Mayor’s Permit
The following are the documents required in order to secure a business permit: * SEC registration documents such as AOl, By-laws, Certificate of Incorporation * Locational Clearance * Lease Contract (depending) * Barangay Clearance