Business Plan report

Background This example is rooted in a hypothetical University where retiring ex-staff represent a large loss of knowledge assets. Certainly other members of staff can, and must, take over their senior management responsibilities, but cuts in staff numbers means that these people will have less and less time to do so. To ensure the smooth running of the University, and to avoid abrupt changes in the University’s relationships with the commercial sector, it makes sense to retain retiring knowledge assets as consultants on an ad hoc basis. Thus: The challenge Find out how to create a holding company called WFYK Holdings and how WFYK Holdings can create a daughter company “Emeritus Consulting”. Emeritus operates with a list of University staff who have recently retired, are retiring, or who are taking early retirement. These people can operate as freelance consultants on an hourly basis at/for the University, or at/for the University’s industrial partners, or with other contacts mediated through Emeritus Consulting. Revenues for the services rendered are paid to Emeritus Consulting, and at year-end, earnings rise up (tax-free) to WFYK Holdings. The consultant is not paid in cash, but rather in warrants for WFYK Holdings. Warrants are realised to non-voting stock at year-end. WFYK Holding guarantees to buy back stock at market price on demand whereupon monies are transferred back to the consultant. Alternatively, monies arising from outstanding stock are transferred to consultant’s estate 7 years after death. The project is to complete a feasibility study and business plan for the above, taking tax (corporation tax, income tax, inheritance tax), trust funds and other corporate legislation (holdings, stock, warrants etc) into account.