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Scope of Business Organization

“Scope of Business Organization” Section A 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.

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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 ) 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? Section B Think of a business which you wish to start and answer the following questions: 1. What will be your objective to start a business? (5) 2. Which business structure is most suitable for this business; give the logical reasons for adopting this business structure? (10)


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