Assignment No. 01 Marks: 20
Moaz Restaurant in Faisalabad offered variety of food items in breakfast, lunch and
dinner and was especially famous for Hi-Tea packages. In the beginning, it was owned and
operated by Mr. Bilal who was earning good profit from the restaurant but after few years of
successful business he started facing health issues which forced him to sell the entire business
to one of his relative Mr. Ali.
Although Mr. Ali had capability as well as expertise to manage restaurant business but
competition was continuously increasing due to opening of internationally known brands in the
city. These restaurants had launched extensive marketing campaigns to increase their
sale/profit by focusing good relations with their customers and suppliers.
Mr. Ali soon realized that he should spend reasonable amount of capital as well as time
on promotional activities in order to survive and there was also a dire need to establish good
relations with customers, suppliers and other clients. But it was difficult for him to manage all
these activities alone. He shared the problem with his friend Mr. Yasir, who agreed to help him
in managing the business affairs on terms & conditions of 50% profit/loss sharing.
Question no 1 (04 Marks)
Keeping in view three forms of business, you are required to identify what was the form of
business when it was initially run by Mr. Bilal? Support your answer with logical reasons.
Question no 2 (10 Marks)
What was the form of business when Mr. Yasir joined the business with Mr. Ali? Which
benefits can be obtained from this type of ownership?
Question no 3 (06 Marks)
Suppose the business has total assets worth Rs. 450,000/- and total liabilities of Rs. 800,000/-.
Mr. Ali has the personal property of Rs. 200,000/- and Mr. Yasir has the personal property of
Rs. 125,000/-. In case the business is liquidated and declared as bankrupt, up to what extent
Mr. Ali & Mr. Yasir will pay from their personal property to satisfy the creditors' claim? You
are also required to discuss the possible treatments if any of them is unable to pay from
personal property
Solution:
::::::::::::::::::::::::::::::::::::::
1. What will be your objective to start a business? (5)
To facilitate students
profit earning
establish sound and long term business relation with cusomers(students)
provide better transport facility as compare to others.
social welfare
2. Which business structure is most suitable for this business; give the logical reasons for adopting this business structure? (10)
i think corporate socity would be best for this purpose because it is student need and welfare based bussiness and coprative socity provides cheaper facilities and hving easy n quick formation............. (dont take it bench mark)
3. What sorts of promotional activities will you perform before opening this business? (5)
it ll be according to question #2. pool resources etc::::::::::::::::::::::::::::::::::::::::::::
Pc 1. What will be your objective to start a business? (5)
If I start this business my vital objective would be "customer's satisfaction" because that's the way through my business will grow up. But it is not possible by only planning minor or sit back and hoping to see money. But I need to couple of crucial things in my mind and act upon them. Setting objectives engage a continuous process of research and decision-making. 1st of all Knowledge of yourself and your entity is a vital preliminary point in setting objectives. 2ndly Goal setting should be the vital part of your business and is one of the major part of a good business strategy. Lots of people when they establish a business ignore to do this and in the end continuous circles achieving very little. So I must say that one should really focus on goal setting if he wants the ultimate customer's satisfaction.
2. Which business structure is most suitable for this business; give the logical reasons for adopting this business structure? (10)
Before starting any business 1st of all we should be aware and to know various types of legal business structures that exists along with there benefits and drawbacks. If I start this business then I will choose sole proprietorship coz it is type of business that don't need such legal entity like registering your business in local municipality. The other big advantage of this structure is to give me full control on financial place it mean I can enjoy full share of profit. And one more logic is that it is easy to form not much money or investment or equipment required for it. Usually it remain away from taxes. In this type of structure of business the sole proprietor alone is responsible for all decisions. He is free to take any decision on his own. Since no one else is involved in decision making it becomes quick and prompt action can be taken on the basis of the decision. In sole proprietorship structure the owner has full control over each and every activity of the business. As we know owner has all power with him it is possible to exercise better control over business. Business secrecy is an important aspect for all businesses. It refers to keeping the future plans, business strategies, etc. secret from outsiders or competitors. In the case of sole proprietorship business, one is in a very good position to keep his plans to himself since organization and control are in his hands.
3. What sorts of promotional activities will you perform before opening this business? (5)
Advertisement has become an important part to promote any sort of business so I will also not stay behind from it. But one thing also need to keep in mind that I am also going to form a business establishment that require some investment so I must keep on eye on low cost advertisement activities. Such as
Brushers : I will spend some of the my budget on Brushers to tell people that I am going to start this business so more and more parents adopt my pick and drop service for their children.
Local Cabal Network : when I wish to promote this business at local area especially at cheap basis then there is nothing better use local cabal network as a key for advertise my business.
Internet : If my budget supports me to do advertise more than I should not hesitate to open a website of my business.
Hiring Qualified Service : Most important thing is that no one should deny my business and should not give wrong feedback to do this I should hire such drivers who know enough about road sense and rules.Questions # 1
1) What was the original form of business?
Answer) Ansar Ali was a single owner of auto workshop business before his death. Business form was that time sole proprietorship.
This is simplest form of business organization, which is Controlled, owned and invested the capital by himself; called sole proprietorship.
2) What form of business will be created between Mr. Akram and Mr. Ajmal?
Answer) This form of business will be partnership created between Mr. Akram and Mr. Ajmal. Partnership is the relation of both partners by agreed share ratio of investment in business carried on by all or any of them acting for all. Unlimited liabilities will be for each partner. Partner means lawful business owned by two or more persons.
A business which has partners; two or more than two is known as partnership.
3) What will be the Akram's Status in this business?
Answer) Mr. Akram's will be in this business as Sleeping partner and his status is also owner by agreed investment ratio.
4) What will be the Mr. Ajmal status in this business?
Answer) Mr. Ajmal will be in this business as Active partner and his status is also owner by agreed investment ratio.
5) How Mr. Akram will benefit from this form of business?
Answer) Mr. Akram has facing problem of business and unable to control after his father death. So he agreed with Mr. Ajmal in partnership to run existing business. Mr. Akrm now can continue his job of Habib bank, and also can get the profit from the business which is being run by Mr. Ajmal. Mr. Ajmal has only invested in the business and all the business is being handled by him, but profit will be shared among both partners.
MGT211 Assignment#1 Solution Spring Fall 2011
Question no 1 (04 Marks)
Keeping in view three forms of business, you are required to identify what was
the form of business when it was initially run by Mr. Bilal? Support your answer
With logical reasons.
Answer:
This Business was Sole proprietorship when it was initially run by Mr. Bilal.
Reasons:
1. As we know that Sole proprietorship is a business that is owned and run by a single person and that business was run by the single person Mr.Bilal so it was Sole proprietorship.
2. Being the only single owner of the business Mr.Bilal was able to take any kind of decision regarding his business.
4. He was All in all doing his Business.
All these things shows that The business of Mr.Bilal was Sole proprietorship.
Question no 2 (10 Marks)
What was the form of business when Mr. Yasir joined the business with Mr. Ali?
Which benefits can be obtained from this type of ownership?
Answer:
When Mr.Yasir joined business with Mr.Ali, it became partnership.
Partnership means a business shared and owned by two or more persons being staying in law and rules.
Benefits of This Types of Ownership are as follows:
1. Partnerships bring the benefit of "economy of scale" with the sharing
of both responsibility and funding requirements. In this type of business business can get more and more funds and more money which can make the business run successfully.
2. In partnership profits and loss are equally shared in an agreed ratio. If this business goes in loss then the loss will also be equally shared among the partners.
3. This type of business has a flexibility component. Because the owners of a partnership are usually its managers, especially in the case of a small business, the company is fairly easy to manage, and decisions can be made quickly without a lot of bureaucracy. This is not the case with corporations, which must have shareholders, directors, and officers, all of whom have some degree of responsibility for making major decisions.
4. Partnership provides more support and will allow for more creative brainstorming.
5. With partners to share the responsibilities and lighten the workload, members of a partnership often find that they have more time for the other activities in their lives.
6. Partnership can enhance the communication skills of persons that are indulged in this business. As they all need to communicate with one another so their communication skills will improve day by day.
7. Other Benefits
• Transfer of Rights
• Management
• Easy Formation
• Easy dissolution
Question no 3 (06 Marks)
Suppose the business has total assets worth Rs. 450,000/- and total liabilities of
Rs.800,000/-. Mr. Ali has the personal property of Rs. 200,000/- and Mr. Yasir hasthe personal property of Rs. 125,000/-. In case the business is liquidated and
declared as bankrupt, up to what extent Mr. Ali & Mr. Yasir will pay from their personal property to satisfy the creditors' claim? You are also required to discuss
the possible treatments if any of them is unable to pay from personal property.
Answer:
In general partnership, each partner is personally liable for 100% of
the partnership debts, means if there are not enough business assets to pay
those debts then your personal assets are used to pay all of the business debts
not just your pro rate share. So here Mr. Ali and Mr. Yasir Personal Assets Can are use fully to business pay
debts if business assets are not enough.
If One partner is unable to pay their share, then other partner is then
responsible for paying all of it. hello guys ye mukhtlif idea solution hain agr smjna lagen tou plz bta dena actually ye text form mein hain in ko pehle ms word pa rcopy paste kar lena then smj lag jaegi
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