Principles of Management Essentials You Always Wanted To Know (3rd Edition)

Ethics is the study of what is right and wrong. It examines the principles and values that guide human behavior. In essence, ethics is concerned with the standards that dictate how people should act in various situations. It promotes fairness, respect, integrity, and responsibility. There are many different theories of ethics. To begin with, ethics emerge from two primary philosophies, “deontology” and “teleology.” Deontology is derived from the Greek word “deont,” meaning binding, and teleology from “telos,” meaning end. How Are Deontology and Teleology Philosophies Different from Each Other? Deontological ethics imply that the moral value of the decision is more important than the consequences achieved from that decision. On the other hand, teleological ethics means that the selection or decision depends on the value of the consequences associated with each choice. Ethics are absolute in the former philosophy and subjective in the latter. In deontology, ethical choices are the only way to live. But, in teleology, one evaluates the choices, weighs the outcomes, and makes a decision that suits most stakeholders because the ends justify the means. For example, from a deontological perspective, the believer of a religion must follow all the rituals or apply all the learning prescribed by that religion without questioning the externalities, results, or outcomes. However, from a teleological perspective, one may choose secularism and make decisions in a way that benefits the maximum number of people. An Example of Deontology vs. Teleology in Action In business ethics, let’s assume a construction company evaluates a proposal to set up a hospital by demolishing a religious place. Suppose the company follows a deontological philosophy, and its code of ethics considers demolishing religious buildings or structures unethical. In that case, the company will not consider accepting the proposal, irrespective of the costs and benefits associated with this proposition. However, suppose the company follows a teleological philosophy. In that case, the management will evaluate the costs and benefits associated with all the options, and the final decision shall be the one that benefits the maximum number of stakeholders. Duty Ethics and Utilitarianism From the above philosophies, two major theories of ethics emerge: duty ethics and utilitarianism. Duty Ethics, emerging from deontology, comprises the body of knowledge led by philosophers like Immanuel Kant. According to this theory, ethical choices are duties. One must fulfill these obligations irrespective of the consequences while living in a society. For example, one must vote in a democracy regardless of one’s liking or disliking of contemporary politics or eat vegetarian food if prescribed by one’s religion. A business must contribute to community development initiatives through Corporate Social Responsibility (CSR) programs because the business considers it to be its duty to give back to the community and not because it shall create a positive brand image or because it is a legal obligation. Utilitarianism, on the other hand, emerges from teleology. In utilitarianism, the right, ethical option is the action that creates the greatest good or utility for the most significant number of people. Good refers to utility, value, benefit, happiness, or any positive outcome. According to this theory, decision-making involves listing all options and evaluating the benefits of each option. The option that creates the maximum net positive benefit for maximum stakeholders is to be selected. An Example of Utilitarianism in Ethical Decision-Making Let us consider the example of a business organization with the option to decide whether or not it should shift to a more environmentally friendly technology. One option is to continue with the existing technology. This is currently beneficial in terms of cost but can lead to higher costs in the long run. Expected changes in competitors' moves and government policies indicate that the company will eventually have to shift to this technology. If it does so under pressure later, it will lose out on reputation, economies of scale, and first-mover advantage. Considering a holistic appraisal of the situation, the company will benefit from shifting to the new technology in the long run. It will reduce costs and generate brand equity and government support. Thus, using the utilitarianism concept, investing in new technology will be the better option. The theory implies that one must consider the net positive benefit created for the firm in the long run. However, assessing outcomes takes time and may involve subjectivity. Further, while considering all the stakeholders, this approach may not favor minority or vulnerable and marginalized stakeholders. Virtue Ethics Apart from these theories, one should also be aware of virtue ethics and ethics of care. Virtue ethics explain that one must choose virtue over anything; neither duties nor outcomes affect ethical choices, but what matters is the intention and effort to lead a virtuous life. One selects an option because this is the person one wants to be, regardless of whether it is one’s duty or leads to beneficial outcomes. For example, a teacher who tries to be empathetic to the students has chosen to be so because the person feels this is how one wants to be; it has nothing to do with expectations of society or the benefits of her empathy for students. In a business context, a firm may operate in a geographical location where business owners present gifts to politicians. They may not be paying them money, but offering gifts in kind. In such cases, the business owner may not agree to this culture because they want to be an entrepreneur who builds their venture without engaging in any form of corruption. They do not agree to present gifts because they believe it is equally unethical. Care Ethics Care ethics are based on compassion, empathy, and similar values. They are different from other theories of ethics. Usually, rational humans are expected to rely on reason, rationale, or logic while explaining ethical choices. In duty ethics, the purpose is fulfilling obligations. In utilitarianism, value maximization is the goal. Character building and leading a virtuous life are the outcomes of virtue ethics. But, one may make exceptional decisions in care ethics because the situation demands human values, emotions, nurturing, and a caring attitude. For example, one may choose to provide benefits to a minority group because they come from an economically disadvantaged section of society and need support to be at par with financially advantaged groups. In a business scenario, one may make exceptions in lending procedures if one feels the client needs support in a difficult time. However, if the organization relies on care ethics to make decisions, the associated risks are favoritism, nepotism, and undue advantage. In navigating today’s complex business landscape, ethical theories provide valuable guidance. They help business leaders make responsible decisions that balance profit with principles. By understanding frameworks like deontology, teleology, and utilitarianism, companies can clarify their values, anticipate stakeholder expectations, and make decisions that serve both immediate goals and long-term integrity. Ultimately, these ethical theories remind us that business is not just about financial success but also about positively impacting society and building trust. Embracing ethical thinking in every decision empowers businesses to grow sustainably and fosters a culture of accountability and respect for all stakeholders. For those looking to get an in-depth understanding of such topics, read Business Ethics Essentials You Always Wanted To Know. It is an easy-to-understand guide to all the essential business ethics concepts, including complex ethical frameworks, tests for ethical decision-making, and future trends in business ethics. This book is a part of Vibrant Publishers’ Self-Learning Management Series and is suitable for entrepreneurs, leaders, and professionals. This blog is written using excerpts from “Business Ethics Essentials You Always Wanted To Know” by Dr. Ritika Mahajan. Business Ethics Essentials You Always Wanted To Know - A roadmap to making integrity a core business asset. Find out more about the book here: Link to the book: Business Ethics Essentials You Always Wanted To KnowAuthor: Dr. Ritika Mahajan Press Release: Vibrant Publishers Introduces “Business Ethics Essentials” for Aspiring Ethical Leaders and Professionals Also Read:Ethics in Market Research The Social And Ethical Side Of Marketing

It’s a familiar refrain: “Kids today and their phones! They don’t even look up and can’t talk to each other!” or “Videogames are making kids fat, lazy, and probably violent!” or the new kid on the block “AI is going to take my job and probably take over the world!” With all this new technology and our ability to access pretty much the sum of human knowledge with a few keystrokes, one is reminded of that old song from The Police: “Too much information running through my brain/ Too much information driving me insane.” It’s all just TOO MUCH! Is this really the End of Days? Are we really doomed to a Terminator 2 world with robot overlords? With all this information coming at us at lightning speed, what are we supposed to do about it? Wouldn’t it be great if we had some kind of tool to cut through noise and help us make sense of it all? The new book, Digital Shock, is that tool, and it is as timely as today’s headlines. My colleague, Dr. Jagdish N. Sheth, and I address these questions and more in the book. We operate from the assumption that everyone is exasperated and exhausted, pummeled by a barrage of change, looking for some way to make sense of what is happening and to have something to hold on to. It is a daunting proposition, to be sure, but I think we are up to the task. We apply our combined 50 years of knowledge acquired from academia, research, and business leadership to the problems facing modern society by rapid technological change. Together with the work of over one hundred studies from researchers, experts, and professionals from dozens of fields, we seek to provide explanations, analysis, and, most importantly, hope. Everything Old Is New Again Although it is human nature to assume that one’s own generation is under assault from the next in line, we submit that, no, we have been here before and have lived to tell the tale. Human beings act in very predictable ways when faced with change. We tend to freak out and resort to extolling the virtues of a bygone era, of simpler times when things made sense. Just listen to any parent talk about his or her children. Profound changes have occurred many times over human history: the Agricultural Revolution, the Bronze Age into the Iron Age, international trade, map-changing wars, and the like. The difference is that, with very few exceptions, the changes were gradual and took years, decades, or even centuries, giving us time to adapt and cope. We examine two specific eras of technological shift: The Industrial Revolution and the Digital Revolution of the 1960s to the early 2000s. In both cases, technology disrupted large swaths of behaviors in social, political, and economic ways. We consult the historical record and the work of noted historians to put those eras in the context of what changes occurred and, most importantly, how people dealt with them. It is comforting to know that, in many ways, changes have come along, but people have found a way to deal with them. Growing pains and all that. Again, the x-factor is speed. The changes took decades to manifest in truly disruptive ways in both cases. Not so much today. It's All Steve Jobs’ Fault! With the advent of the smartphone in 2007, modern life became defined by rapid, almost overnight, change. We detail studies in which warp speed has seeped into the worldview of Gen Z to the point where they grow impatient if they are not promoted within six months of being hired. We look at modern online dating practices and how speed has affected our expectations in matters of the heart. Video games and their potential for developmental problems in the young get their own sections. Even political partisanship and polarization, ripped from the headlines as they say in Law and Order, occupy a large section of the book. However, there is balm in Gilead. We have a toolbox to help us deal with the change constructively or at least minimize the damage so we can live our lives with some semblance of balance and normalcy. Hold On: Help Is on Its Way At the end of each chapter is what we call the Steering Wheel for the Future. It is a tool that helps break down the potential problems brought about by digital shock and provides actionable steps to help cope. For example, Chapter Five, which deals with cybercrime, gives attainable ways to help prevent becoming a victim. If video game addiction is a real problem, we provide evidence-based methods to help achieve moderation and limit potential problems. Even online dating has its own section, and we provide methods gleaned from research for dealing with the dangers posed by meeting partners online. Perhaps the best thing Digital Shock has going for it besides its depth and breadth is its concise tone. We strove to present our findings and advice in a straightforward way that is easily accessible to the average reader. You don’t have to be a graduate student in Cultural Studies or Computer Science to understand the information and implement the strategies. Given that anxiety over digital shock is so widespread, our plainspoken tone is intended to give the book strength and resonance to the general reader. It was our intention to make it a pleasant and informative read and hopefully, even be entertaining at times. It's Fine. I’m Fine. Everything Is Fine. With so much handwringing and pearl-clutching over the perceived dangers of the Digital Revolution, we think it is useful to have a compendium like Digital Shock available to refer to. It can be the place of refuge in a hurricane of change, the tree to which we can strap ourselves so we don’t get swept away. Read this book if you are looking for shelter from the storm. This blog is written by Suresh K. Sharma, co-author of the book, ‘Digital Shock: Seven Shocks that are Shaping the Future’ published by Vibrant Publishers. Find out more about the book here: Link to the book: Digital Shock: Seven Shocks that are Shaping the FutureAuthors: Dr. Jagdish N. Sheth and Suresh K. SharmaPress Release: Vibrant Publishers Unveils Galley Copy of Digital Shock by Leading Experts Also Read:Visioning the FutureCan AI Take over Data Analytics?Don’t Believe These 7 Myths About Blockchain

Growth, development, and learning are the only constants when you want to make it big in your career. While you may get an inspirational boss, the right kind of job, or ideal work conditions, gathering speed in your career requires constant learning. This is especially true when you want a strategic and planned approach to career growth. Different people find comfort in adopting varied methods of learning especially when it comes to self-learning. While some people may choose to take courses, online or offline, others swear by the good old method of studying with the help of books. For a lot of reasons, the advantages of using books or e-books for studying surpass learning with the help of other methods, here’s how: Your book will not make noise, and even in the still of the night, you will have complete control of your study without interruptions. If you’re using physical copies of a book, you do not have to worry about low battery or re-charging it. In most instances, self-learning books for career growth turn out to be much more affordable as compared to other methods of learning like courses, both online or offline. While arguments generally point in favor of studying with the help of books, it is also important to have a strategic approach to choosing the books that you want to study. Choosing just any book could adversely affect your learning. Top Tips for Picking Self-Learning Books: The right books can have a positive impact on your education. When you know how to choose books, you can be sure about attaining knowledge that will make a real difference in your career. It is therefore important to learn how to pick your books. Here are three ways in which you can make the right choice in books for your career growth: 1. Relevance: Look for books that are most relevant to the kind of knowledge you seek to gain from your learning experience. You need to look for a book: That adds value to the existing knowledge you have That offers technical details on the subject you are studying That offers valuable information owing to subject matter expertise That consists of material (chapters) you can use in your field of study or work These factors can be gauged by checking out the book summary given on the back cover of a book, or the topics covered in the book which can be checked in the Table of Contents, among other things. Before making your purchase, you can also choose to read through a couple of chapters, some marketplaces allow you to read sample chapters online. If you are buying your book offline, you can take your time to read at least one chapter before you actually head to the checkout counter. For example, if you seek to grow to a management position in the arena of human resource (HR) management, you need to read HR management books that will help cover concepts like HR management, strategizing, organizational development, and more. Similarly, if you want to master the concepts of finance and accounting, you could consider picking a book that talks about accounting, balance sheets, financial statements, accounting cycles, taxes, etc. 2. The Author: Once you are aware of the kind of material you want to learn from, you need to then zero in on the authors who are knowledgeable in your choice of subject. Subject matter experts who have written multiple books on their subject and are bestsellers on marketplaces can be a safe bet. For instance, if you are looking for a book on marketing, books written by legends like Philip Kotler, Jagdish Sheth, or Gerald Zaltman could be helpful. However, if a subject matter expert has written their first book, they could still share important lessons that will help you for life. Take the example of John Caples, an advertising veteran with a 6-decade-long career. Caples wrote his first book 'How to Make Your Advertising Make Money' at the age of 83 which was a hit and is still teaching important advertising lessons to readers in this day and age. Other first-time authors like Dr. Michael Walsh, Komal Shah, and Dr. Bianca Szasz, have written high-quality, easy-to-understand books on HR Analytics, Business Law, and Data Analytics. There may be different types of authors - first-timers, experienced or famous, as far as they have the subject matter expertise, they can be your best pick. 3. Publisher: Looking for relevant material and the right authors may be streamlined by picking a trusted publisher. The publishers decide on topics for books, look for subject-matter experts, run background checks on prospective authors, evaluate the writing styles of experts, check that the content flows naturally, and enable ease of understanding in the content while keeping it comprehensive. The publishers also ensure that unique and valuable information is included in the book while making efforts for the book to be easily accessible. When looking for a publisher, the characteristics you need to be on the lookout for are: They should be in the business for a substantial amount of time, adding credibility through experience. They should hold expertise in the subject that you seek to read. A publisher that is into children’s books may not be the right one to buy management books from and vice versa.  They need to have the right subject-matter experts on board. Many publishers can help you with books in pursuit of career growth, and one among the prominent names is Vibrant Publishers. We have been in the arena of publishing self-learning management, test prep, and interview question books for 11 years, making us veterans in the domain. Our attention to detail, eye for quality, and meticulous author selection process make us front-runners among our peers. Conclusion: Apart from looking for relevant books, knowledgeable authors, or trustworthy publishers, you may also find books through other methods such as recommendations. The recommendations could be from professors, book recommendation websites, libraries, or other resources. No matter how you find your book, it is important to remember that you get one that is easy to learn from and can be used in furthering career growth. It is safe to say that choosing books to aid career growth is not too complicated. All you have to do is take the right approach in picking the books with a clear view of your end goal.   Also Read:  Choosing Organizational Development as a Career Top Career Opportunities in Social Media MarketingEXPLORE YOUR CAREER OPTIONS IN OPERATIONS AND SUPPLY CHAIN MANAGEMENT

It is on record that the Indian economy grew exponentially under Prime Minister Narendra Modi’s leadership despite the debilitating effects of the COVID-19 pandemic that had slowed down many world economies, including that of the United States, China, and Japan. In 2023, India’s GDP expanded by 6.4% while China’s GDP only grew marginally at 5.4% and the United States’ GDP increased by 4.9%. 6 Facts that indicate that the Indian economy is doing well under Prime Minister Modi At the current rate of growth, India is projected to surpass Japan as the third-largest economy in the world by 2030. The recent progress recorded in the Indian economy is linked to the following socio-economic advancements recorded under the able leadership of Narendra Modi: 1. Moderate Inflation: The inflation rate in 2013, just before Narendra Modi took off as the Prime Minister was estimated at 9.13 (with the 5-year average topping 10.38). However, he has been able to dramatically bring India’s inflation down to as low as 4.45 (October 2023). With a moderate inflation rate, the purchasing power of an average Indian household has consequently increased. 2. Stable Interest Rate Regime: India’s interest rate regime is relatively stable; it indicates that its interest rate is not affected by any ups and downs in the open markets. In case a nation’s interest rate is market-driven, there are some obvious disadvantages of having a “floating” interest rate: Indian businesses and the government borrowing money from foreign investors have to pay more when the interest rate goes up and it also affects the prices of real estate property; houses may appear unaffordable to most earners except the super-rich. 3. Robust Foreign Exchange Reserves: Since India learned a great lesson from the 1991 near-apocalyptic Balance of Payment (BoP) deficit that made it impossible for the government and Indian businesses to import necessities from overseas, the story has changed for the better. As of October 2023, the Reserve Bank of India reported that India’s foreign exchange reserves stood at $586.111 billion. This allows Indian businesses to import the raw materials they require from other nations without necessarily worrying about the government not allowing them to pay in dollar denomination. 4. Increased Foreign Direct Investments (FDIs): Over the past three to five years, India has witnessed an unprecedented increase in the number of Foreign Direct Investments (FDIs) flocking into the country. In 2013, before Narendra Modi assumed leadership, India had received about $34.3 billion in FDIs. Surprisingly, in 2022, that amount is more than doubled to $84.8 billion. This is largely due to the Modi government’s efforts at liberalizing the Indian economy which is now more market-driven and transparent for international investors to bring their funds to jumpstart diverse aspects of the Indian economy. 5. Vibrant Local Startup Ecosystem: India’s startup ecosystem is one of the biggest in the Asian subcontinent, with a total of 61,400 startup companies in operation in the country. The good news is that Indian startups are increasingly hiring more and more professionals than some of the traditional businesses, and they have received foreign investments that are worth about $70 billion between 2014 and 2020. 6. Superb Leadership: What has made all the above-mentioned socio-economic advancements possible is the indefatigable leadership of Prime Minister Narendra Modi. He has worked laboriously to reform several areas of the Indian economy, from initiating and implementing widespread reforms in banking, education, taxation, farming, trade, healthcare, and other sectors. India has repositioned itself as a nation that is open and willing to do business with other countries. This wasn’t always the case when the Indian economy was purely self-focused and embraced little international trade. What the Prime Minister has achieved is the liberalization of most industries to allow and encourage foreign investment. India’s Road to Transformation: Why Leadership Matters, a book written by Dr. Jagdish Sheth and Gyanendra Singh, two US-based Indian academics who dream of a better and more advanced India, sheds more light on their beloved country’s current rate of growth and the challenges it has to overcome to fully transform as an economic powerhouse. Front cover of India’s Road To Transformation: Why Leadership Matters book Does India have what it takes to become a superpower in the likes of the United States and China in the next 7-10 years? The authors of India’s Road to Transformation: Why Leadership Matters convincingly think that it does, but with a caveat that Indian people must encourage and support a transformational leader to get the job done. Who among the crop of modern-day Indian leaders does the cap of a transformational leader fit? After making some critical analyses, the authors believe that Narendra Modi, judging by his actions and performance to date, is worth being trusted with Indian leadership for another term. To discover how they arrived at this very important conclusion, read the entire book yourself and make your own judgment about the undeniable facts highlighted in India’s Road to Transformation: Why Leadership Matters.   About the Authors Dr. Jagdish Sheth is Charles H. Kellstadt Professor of Business at the Goizueta Business School at Emory University and is globally known for his scholarly contributions to consumer behavior, relationship marketing, competitive strategy, and geopolitical analysis. Dr. Sheth has been on the board of several companies including Norstan, Pacwest-Telecom, Cryocell International, Shasun Drugs and Chemicals, and WIPRO Limited. He is the Founder and Chairman of the Academy of Indian Marketing (AIM) which supports research and scholarship among Indian scholars in marketing and management. Gyanendra Singh is a former P&G executive, Managing Partner at The Partnering Group, and Director of the Center for Retail Management at the Kellogg School of Management. His initial career in R&D led to two patents and new products. This was followed by a marketing and management systems career, during which his strategic insights led to many concepts of Category Management. He has authored many articles and books and advised multinationals across the globe— from Argentina to Russia. Subsequently, his work has focused on change management within large organizations, including national transformation.

Read about Vibrant’s first year at the pre-eminent annual conference. The 83rd Annual Meeting of the Academy of Management was convened in Boston, Massachusetts, USA from August 4-8, 2023. More than 10,000 attendees from 80+ countries came together to delve into the theme of “Putting the Worker Front and Center” and engaged in 2,300+ scholarly sessions. The conference hosts academics in the fields of management and organization, which include students and practitioners who come together to discuss the most vital issues pertaining to both spheres. It provides a platform for the attendees to present their research, receive and provide feedback, and network with members of the community. Vibrant Publishers was a proud member of the conference where we showcased our Self-Learning Management books, and networked with fellow publishers and practitioners. Our founders at the Academy of Management exhibit   Our range of Self-Learning Management series at Booth #513 The conference was attended by our founders Avani Udeshi and Deep Udeshi. Our booth (number 513) featured our complete array of Self-Learning Management books on topics such as digital marketing, business law, entrepreneurship, economics, operations and supply chain, and human resource management to name a few (check out our complete collection here). Alongside our books were the galley copies of our upcoming titles, namely Macroeconomics Essentials, Social Media Marketing Essentials, Service Marketing Essentials, and Personal Finance Essentials (interested readers who would like to provide feedback on the book before it goes on sale can request a galley copy here). We encouraged management experts to publish with us and management professors to adopt our books in their courses’ curricula. Visitors with our t-shirts   Our interactions with visitors were lively and informative at the same time Avani and Deep got the chance to interact with professors, practitioners, and students from countries all around the world: India, Canada, Israel, Korea, Lebanon, Germany, France, Italy, Poland, and the USA. “We got to interact with them and tell them about our books relevant to their fields of expertise. Most of the visitors were keen on knowing more about our Self-Learning Management series, and we were more than happy to walk them through it. My mentor, Dr. Jagdish Sheth, was the one who recommended that we attend the conference this year. I’m glad we followed through on his advice,” said Deep. A visitor having a go at Spin The Wheel To entertain our visitors, we hosted a fun activity Spin The Wheel, which offered them the opportunity to win goodies such as pop sockets, t-shirts, and other surprise gifts. The visitors were also handed merchandise like bottles, phone stands, t-shirts, and handbags. We also met fellow publishers, conducted fruitful conversations, and exchanged ideas. After a triumphant maiden run, Vibrant Publishers is all set to attend the next iteration of the conference that will be held in Chicago, Illinois, where we hope to bring our personal brand of ideas to champion the theme “Innovating for the Future: Policy, Purpose, and Organization.” Hope to see you at Booth No. 504 next year!  

While a Limited Liability Company (LLC) provides a hybrid structure between a corporation and a partnership, there are questions about the taxation structure to be adopted for this entity. For an LLC, the available options for taxation are whether to opt for taxation as a partnership or an S-Corporation. Either way, one thing is certain - an LLC is a “pass-through” entity. This means that its income is passed on to its owners as their income and the income of the LLC can be reflected in the income tax returns of the owners. Owners of LLCs are called “members”  and the persons managing the operations of the LLC are known as managers. A member of an LLC can be an individual, a partnership, another LLC, a corporation, or a trust. The default mode of taxation of an LLC is that of a sole proprietorship if it is a single-member LLC and a partnership if it is a multi-member LLC. Therefore, if you don’t do anything, your LLC will be taxed either as a sole proprietorship or as a partnership, which means that the income of the LLC will simply be declared on the proprietor or the share of profits will be declared on the partners’ tax returns. What exactly is an S-Corporation? S-Corporation is not an entity form. It is just a manner in which an entity can be taxed. So your entity would have to be either an LLC or a C-Corporation and then you can elect for it to be taxed as an S-Corporation.   What do you need to consider when making the decision? In our case, we are considering if we should elect for our LLC to be taxed as an S-Corporation. An important difference between when you are opting for your LLC to be taxed as a proprietorship or partnership and when you are opting for your LLC to be taxed as an S-Corporation is the manner in which the owner or the member’s income is taxed. When an entity is taxed as a proprietorship or partnership, the income that the owner gets is treated as self-employment income. This is because the owner owns the business, and it’s not considered to be separate from the owner. When an entity is taxed as an S-Corporation, any income that the owner receives from the business is considered to be the owner’s remuneration or salary, not self-employment income. However, this is if the owner is actively working for the business (you don’t get a salary if you don’t work!) and not just drawing passive income from the business. And this is why, the way the taxes are applied on such income changes. Further, you can split the income that you receive from the business into two categories: Salaried income which will be subject to payroll taxes such as social security and medicare taxes. These are payable under the Federal Insurance Contributions Act (FICA). Distributions, i.e. dividends from the business, which are not taxed in the same way as payroll or self-employment taxes, and therefore, these can be taxed on the normal income tax slabs. By doing this, it is possible that your aggregate tax bill is reduced. However, any convenience comes with its own complexities. First of all, there are some conditions that you need to fulfill if you wish to be taxed as an S-Corporation: You cannot have more than one hundred members. That’s not so difficult to fulfill, considering that most LLCs are single-member LLCs. However, another condition is that you cannot have anyone other than an individual as a member. So if you’re looking for a Corporation to be a member of an LLC (some real estate structures find this useful), then you cannot elect to be taxed as an S-Corporation. Further, you need to have only residents as members. If any of your members are not residents of the US, you cannot elect to be taxed as an S-Corporation. Secondly, being taxed as an S-Corporation requires some formalities to be fulfilled: For a corporation to be taxed as an “S-Corporation”, they must submit Form 2553 with the IRS, provided that they are not financial institutions or insurance companies. Therefore, it is clear that if an LLC meets the conditions for qualifying as an S-Corporation, there may be benefits in choosing to be taxed as an S-Corporation instead of the default mode of proprietorship or partnership. However, such decisions always need to be taken on a case-to-case basis, depending on the business and requirements of an LLC. … This blog is written by Komal Shah, author of the newly launched Business Law Essentials You Always Wanted To Know. She has written this book in the same simple-to-understand language as this blog and has covered a wide range of topics such as basic taxation regimes, employment laws, contract laws, intellectual property laws, data protection laws, etc. Order this book from our website or Amazon if you are a law geek and want a comprehensible guide to learn about the laws in the US.   Also read: Contract for Service: 5 Things You Need to Know What is Entrepreneurship and how do you set up a successful business? Follow These Tips to Get Started (And Succeed) As An Online Entrepreneur  

If you’re running a business, you will need to avail services from different service providers quite frequently, whether it is for the development of your website or for advertising your products or services, or for drafting contracts itself! These service providers are not employees; they are independent contractors and are hired only for a specific project or task. When you engage a service provider to provide different services to you, you need to lay down the terms relating to the standard or quality or timeline for the provision of services and also the payment of the charges for the provision of services, among other things. You can do this by entering into a “Contract for Service”.  Since these types of contracts are required to be entered into by businesses frequently, founders as well as people supporting the businesses need to know what such contracts need to cover.  Here are five things you need to have inside your “Contract for Service”. Clearly defined scope of services Where the services to be provided or availed are not defined clearly, it can create a problem for either or both parties involved. As a service provider, you may end up doing far more than you are paid for, or as a client, you may end up receiving too less than what you are paying for. The service provider may deliver something completely different than what is expected and this can create problems for both parties, since the efforts of the service provider would be wasted and the client will still not get what was expected.  This is why it is very important that the scope of the services is defined as clearly as possible, with the deadlines for delivery clearly indicated. However, often it is not possible to define the services exhaustively and that is why it is necessary to include an authority to a party to determine the quality of services as acceptable or otherwise.  There also needs to be a procedure for incorporating changes as requested by the client and where excessive changes are requested, a mechanism needs to be set up for providing extra charges to the service provider. Payments based on performance milestones  Often, people make the mistake of hiring service providers with a high advance payment. This may happen because the clients want to get something executed urgently, or where the specific skill of the service provider is difficult to find. However, this would have to be done based on how well you know the service provider. The best way to hire a service provider is if they are referred by someone who is known to you. If that is not the case, then the ideal way of payment is by including performance milestones i.e. payment based on work completed. This way, you will never lose money if the service provider leaves the work halfway. Some points that need to be included within a payments clause are as follows: If you are paying a fixed amount to the service provider monthly or quarterly, or fortnightly, etc. over the period of the project, the amount and period need to be indicated clearly. It also needs to be indicated if the amount is subject to any deductions of taxes. You may do this by clearly setting out the goals for them in a Schedule to the contract to be achieved during the period and marking them as Key Performance Indicators. Alternatively, the better way is to list the fixed amounts payable not periodically, but upon completion of specific milestones.  Clearly set out the process of claiming and reimbursing additional expenses incurred by the service provider (if these are to be reimbursed), including the process of raising invoices and the period within which the invoices will be paid. If you wish, you can also mention any incentives or bonuses which may be awarded to the service provider, if the delivery exceeds expectations. While on one hand, it incentivizes the service provider to exceed expectations, care should be taken that this does not become an obligation for the client. Do not forget to include the method of payment to the service provider and the day of the month till which such payments shall be disbursed. If you are the service provider, you might want to include terms that provide for a penalty or interest on delayed payments. Ownership of intellectual property created by the service provider It’s important to ensure that a client who pays the service provider to create intellectual property gets the ownership of any customized intellectual property that the service provider may create at the request of the client. However, sometimes, the intellectual property being provided by the service provider is standardized, for example, a standard software, and in such cases, the client may secure only a license to use such software and may not secure ownership of the software.  Therefore, it is important to clearly provide in the contract as to whether and if yes, what intellectual property will be owned by the client and what intellectual property will be owned by the service provider.  A few points that need to be taken into consideration while drafting the intellectual property clause are as follows:  Indicate clearly which intellectual property is to be assigned by the service provider to the client and what part is an exception, the ownership of which will be retained by the service provider. Where the intellectual property is to be assigned, state that the intellectual property will be assigned from the moment of its creation. Include an obligation that the service provider must support with any registrations of the intellectual property in the name of the client. Confidentiality, non-compete, non-solicit, and non-disparagement clauses These clauses are added in agreements to ensure that the service provider does not: - Leak out or disclose any non-public information that is shared with the service provider while performing the services - Start a competing business or simultaneously provide services to a direct competitor of the client - Take away the client’s employees, consultants or customers - Bad mouth the company during or after providing the services   A few points to be taken care of while drafting these clauses are: These clauses must be kept as broad as possible from a client’s perspective, and as clear as possible from a service provider’s perspective. For example, what can be considered “confidential information” should be broadly defined, but should be clear, so that there are no doubts about whether something can be considered confidential or not. It might be excessive to ask an independent service provider to not provide services to all businesses which are in a similar space as the client. Therefore, it is essential to define exactly what will be considered a competing business and restrict the service provider from providing services simultaneously to only such businesses. Confidentiality clauses should also include clauses relating to a possible data breach or security breach and also provide for the return of confidential information.  All of these clauses should be valid not only for the duration of the agreement but also thereafter, for a reasonable period to ensure that there are no adverse consequences for the client. Preferred governing law and dispute resolution mechanism This clause is very relevant in any commercial contract, especially in international contracts, because there can be two countries involved, and both parties to the contract would want to choose their own governing laws to apply to the contract. Whichever party has an upper hand in the negotiation will be able to ensure that the governing law for such party becomes included in the contract. However, in certain situations, it might actually be advantageous to include the country where the work is actually performed as the country whose governing law will be applied. Further, dispute resolution mechanisms should be chosen with care. Usually, commercial contracts provide for alternative dispute resolution mechanisms because parties do not want to go through the lengthy process of litigation to resolve disputes. But even in alternative dispute resolution mechanisms, the parties have choices between using arbitrators or arbitration institutions and mediators or mediation institutions. Mediation usually provides greater flexibility and therefore, the trend is to choose mediators or use mediation institutions rather than arbitration.  In addition to the above, there would be other clauses also included in such contracts such as terms of the contract and conditions for termination, indemnification, notices, etc. as well, however, the above clauses are the heart of a contract for service and these should be drafted with a lot of care. Want to learn more about business laws in the US? Read our upcoming book, Business Law Essentials You Always Wanted To Know by Komal Shah. This crisp book includes only the most important and relevant laws that affect businesses in the US in lucid and straightforward language. The Advance Review Copy of this book is now available. Click here to review this book.  About the Author Komal Shah has 20 years of experience in corporate law and corporate governance. She led the Initial Public Offering of Indian Infoline Limited and has worked in various in-house roles in companies like DEPFA Bank, Citibank, and Northern Trust. She is the co-founder of LawSikho, a legal ed-tech company where she leads the business legal clinic and teaches students to work and develop hands-on expertise in international contract drafting and compliance-related work. She has helped numerous startups located in India, the US, UAE, Singapore, Australia, etc with contracts, entity formation in the US, flipping, acquisitions, corporate structuring, and investment transactions. 

Life's journey takes us to places and situations that challenge our ability to manage time. If you are an employee with family responsibilities, you may be juggling time to meet your employer and family obligations. If you are also going to school and are responsible for completing coursework, you have to juggle work, family, and school obligations. You may be wondering then, “how can I meet all obligations simultaneously?”     Importance of time management To juggle obligations and responsibilities and keep all the balls in the air without any of them falling to the ground, you must learn to manage your time. There are many distinct kinds of time management tools to choose from. Some of them help you manage your time while at work. Some of them assist with making a short-term goal list and a long-term goal list and help with prioritizing them so that the goals get accomplished within a given timeframe. Then there are other types of time management methods that aid in making sure each day, week, and month is filled with meeting obligations of work, home, school, and community, and even getting some time for your hobbies. The types of time management methods you use are up to you and what you want to accomplish in your lifetime.   Here are two tried-and-tested time management methods that will help you handle all your obligations without any stress.     Working backward Working backward is an effective method to make sure that you are fully prepared for the event or activity scheduled to take place. This is called working backward because you are making a list of tasks that need to be completed by working backward from the destination date (the date of the event or activity).   For example, there is a special event taking place on May 12th. So, you need to begin planning and preparing for it in January. There is a five-month timeframe in which you plan and prepare to be ready for the event. In this scenario, the event is a camping trip with fishing. You are the one in charge of this event. So, working backward, you start planning for what takes place one week, three weeks, eight weeks, or one month before the event. After making this plan, it is easy to follow through with what needs to be done and when it needs to be done. This way, one week before the event, there is no stress, no fuss, and final preparations are in play for having fun and memorable camping and fishing trip.   Figure 1: An example of working backward       Time Blocking But you might wonder how it is possible to follow through on all the tasks that need to be accomplished simultaneously. Well, that takes place with time blocking. Using the time-blocking method, the tasks are done in specific time frames. It could be within the time frame of a month, week, or even a day. This way, it is possible to ensure that the best intentions for following through with doing the tasks when they need to be done actually get completed on time. Blocking out the time in the schedule of a month, week, or day makes it possible to take action on the task needed to be done intentionally. The opposite of using this method is to leave it up to memory to do it, and that leaves too much chance for the tasks not being done and at the last minute having to scramble to complete it.   Figure 2: An example of time blocking accomplishing home, work, and opening a new business obligations within a week time frame     Figure 3: An example of time blocking for accomplishing home and work obligations for a Claims Adjuster within a day’s timeframe.     Some people would argue that watching the clock all the time is like trying to walk backward and not forward. Some other people would say that not keeping track of time will result in wasting it. How you lean on this topic chiefly depends on your point of view and experience. There may have been times in your life when you did not keep track of time and were unprepared for an event for which you had plenty of time to prepare. Not having the correct paperwork, item, money, or the proper clothing while showing up for an event is embarrassing. On the other hand, keeping track of the time can prevent embarrassing moments and give the amount of time needed for proper preparation. For example, you have a scheduled camping trip for which you need to have all the camping equipment, make camping spot reservations, and purchase food items to be prepared on-site. You may also need to make sure that you have  firewood, smores ingredients, and popcorn which are the family's favorites. With proper time management and using the working backward and time-blocking methods, you can have all the camping equipment, food, and firewood ready with you before the camping day. So, which is the better scene? Having all that is needed for the camping trip due to proper time management, or forgetting something and not being totally prepared to have fun at the campsite? To learn how to manage your time efficiently, the book Time Management Essentials You Always Wanted To Know is the perfect resource. This book entails tried-and-tested methods by Dr. AnnaMaria Bliven who is an author, entrepreneur, spouse, mother, and grandmother. She has poured her life experiences of managing time and juggling obligations in the book. The book will be released in April 2023.