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INTRODUCTION TO BUSINESS
MGT (211)
Assignment # 01
Marks: 10
Instructions:

Read the paragraph carefully and answer the questions at the end.
Be specific and to the point while answering the questions.
No definitions and elaboration of terms are required in the solution.
Adopt a professional and practical approach while solving the case study.

Case Study
Mr. Bashir is working as Management Training Officer Grade II in National Bank
Limited. He has joined the bank two months ago against a contract of 3 years. The
terms of this contract states that if he resigns from this post before 3 years then he
is required to refund a sum of Rs. 700,000 and all the training fees. His father
Muhammad Akram is running a printing press from the last 35 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 Yaseen who is assisting his
brother in running a printing press and possess technical expertise and knowledge
in running it. Yaseen hears the entire problem and suggests a solution for it. He
offers himself to render services in running Bashirs business. Furthermore he will
invest in Bashirs business. Yaseen claims a share in profit for taking an active
participation and for investing in the business. Bashir agrees on this solution. Now
Bashir can continue doing his job and Yaseen will run the business.
Questions
1) What was the original form of business?
Answer:

The original form of business was sole proprietorship because Bashir father
Muhammad Akram was running his printing press alone. He was the sole
owner of his business.
2) What form of business will be created between Bashir and Yaseen?
Answer:
Partnership form of business will be created between Bashir and Yaseen
because partnership is the relationship between persons who have agreed to
share the profits of a business carried on by all or anyone of them acting for
all.

3) What will be the Bashir Status in this business?

Answer:
Bashir will be a Sleeping Partner in his Partnership business because he will
contribute his capital only. He will not take an active part in running the
business.
4) What will be the Yaseen status in this business?
Answer:
Yaseen will be an active partner in this partnership because he will take an
active part in running this business. He will also contribute his capital in the
business.
5) How Bashir will benefit from this form of business?
Answer:
As Bashir is doing job in National Bank limited and cannot resign from his
job. He cannot take an active part in running his business. So when his
business will be converted into partnership, he will contribute his capital only
and will not be responsible for managing his business. He will continue doing
his job in National Bank limited and will enjoy share in profit.