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 “Scope of Business Organization”

Mr. Akram is working as Management Training Officer Grade II in Habib Bank Limited. He has joined the bank two months ago against a contract of 5 years. The terms of this contract states
that if he resigns from this post before 5 years then he is required to
refund a sum of Rs. 500,000 and all the training fees. His father Ansar Ali
is running an auto workshop from the last 40 years. One day his father faces
an accident and dies. Being the only son of his father, he is the legal heir
of his father property. Now he has the entire responsibility of managing and
handling his father business. He cannot resign from the job because of the
legal contract between him and the bank. He does not want to windup/close his
father business because his father has spent his entire life in setting up
this business and has secured a strong Goodwill. On the other hand he does
not possess the knowledge and technical expertise of running this business.
So now he is feeling helpless. He discusses this problem with his friend
Ajmal who is assisting his brother in running an auto workshop and possess
technical expertise and knowledge in running it. Ajmal hears the entire
problem and suggests a solution for it. He offers himself to render services in
running Akram’s business. Furthermore he will invest in Akram’s business.
Ajmal claims a share in profit for taking an active participation and for
investing in the business. Akram agrees on this solution. Now Akram can
continue doing his job and Ajmal will run the business.

Questions

1) What was the original form of business?

2) What form of business will be created between Mr. Akram and Mr. Ajmal?

3) What will be the Akram’s Status in this business?

4) What will be the Ajmal’s status in this business?

5) How Mr. Akram will benefit from this form of business?

 


Introduction to Business


Assignment # 01


 


1) What was the original form of business?


Answer: The original form of business was sole proprietorship, because Akram’s father was only one owner of the business. Therefore, where there is only one owner of a business, that business is known as Sole Proprietorship.


 


2) What form of business will be created between Mr. Akram and Mr. Ajmal?


Answer: The form of business between Mr. Akram and Mr. Ajmal will be partnership, because now there are two partners who are running business. A business in which two or more than two persons agreed to run a business is
known as partnership and the owner of business will be the partners.


3) What will be the Akram’s Status in this business?


Answer: Akram will be the partner, and his status is as owner of business.


 


4) What will be the Ajmal’s status in this business?


Answer: Ajmal will be the partner as well, and his status is also as the owner of business.


 


5) How Mr. Akram will benefit from this form of business?


Answer: Both partners are agreed to share their profit in some agreed ratio between them. So, Akram is able to continue his job in Habib Bank, and as well as he will also get a share of profit from the business which is being run
by Ajmal. Mr. Akram has only invested in the business and all the business is
being handled by Mr. Ajmal, but profit will be shared among both.

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Replies to This Discussion

1) What was the original form of business?
Answer: The original form of business was sole proprietorship, because Akram’s father was only one owner of the business. Therefore, where there is only one owner of a business, that business is known as Sole Proprietorship.

2) What form of business will be created between Mr. Akram and Mr. Ajmal?
Answer: The form of business between Mr. Akram and Mr. Ajmal will be partnership, because now there are two partners who are running business. A business in which two or more than two persons agreed to run a business is known as partnership and the owner of business will be the partners.
3) What will be the Akram’s Status in this business?
Answer: Akram will be the partner, and his status is as owner of business.

4) What will be the Ajmal’s status in this business?
Answer: Ajmal will be the partner as well, and his status is also as the owner of business.

5) How Mr. Akram will benefit from this form of business?
Answer: Both partners are agreed to share their profit in some agreed ratio between them. So, Akram is able to continue his job in Habib Bank, and as well as he will also get a share of profit from the business which is being run by Ajmal. Mr. Akram has only invested in the business and all the business is being handled by Mr. Ajmal, but profit will be shared among both.
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thanx malik ji .. u give us nice ideas 2 prepare our assignments ...........
Question:1
What was the original form of business?

Ans:
The original form of business was sole proprietorship, because father of Mr. Akram, Mr. Ansar Ali was a single person who was run the business, therefore the form of business will be sole proprietorship.

Question:2
What form of business will be created between Mr.Akram and Mr.Ajmal?

Ans:
The form of business between Mr.Akram and Mr.Ajmal will be partnership, because in this business there are two members who run the business. so, a business which is run by two or more persons is known as partnership.

Question:3
What will be the Akram status in this business?

Ans:
The status of Akram in this business is owner, and also a sleeping partner. Because a sleeping partner is a person, who just invest money in business and not properly worked for business and get equal share in profit is known as, sleeping partner. So, the status of Mr. Akram in this business is an sleeping partner as well as the owner of business.

Question:4
What will be the Ajmal status in this business?

Ans:
The status of Ajmal in the business is an active partner . Because a partner who invest his money in business and work properly for business and get equal share in profit is known as, active partner. So, the status of Mr. Ajmal in this business is an active partner.

Qestion:5

How Mr. Akram will benefit from this form of business?

Ans:
Mr. Akram will get benefit from this form of business if ,both the partners invest money in business and Mr.Ajmal acting as an active partner provide his fully services properly for business work, and Mr.Ajmal carry on his job in HBL acting as well as an sleeping partner in the business and get equal profit from the business.
1) What was the original form of business?
Sole proprietor ship, single person owning and running the business.

2) What form of business will be created between Mr. Akram and Mr. Ajmal?
Partnership
Partnership means a lawful business owned by two or more persons. The profit of
the business shared by the partners in agreed ratio. The liability of each
partner is unlimited. Small and medium size business activities are performed
under this organization.
(Keeping in mind that his father has died and he cannot leave his job at the
moment)

3) what will be the Akram’s Status in this business?
Sleeping partner
a partner who only contributes is the capital but does not take part in the
management of the business is known as sleeping partner. He is liable to pay
the obligations of the firm.

4) What will be the Ajmal’s status in this business?
Active Partner
A partner who takes active part in the affairs of business and its management
is called active partner. He contributes his share in the capital and is liable
to pay the obligations of the firm.

5) How Mr. Akram will benefit from this form of business?
10. Flexibility
it is flexible business and partners can change their business policies with
the mutual consultation at any time.
Moral promotion:
Partnership is the best business for small investors. It promotes moral courage
of partners.
Secrecy: In partnership it is not compulsory to publish the accounts. So, the
business secrecy remains within partners. This factor is very helpful for
successful operation of the business

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