 GROUP MEMBERS:-

ALI KHAN ( BCS-FA09-011

MASHOOD ABBASI ( BCS-FA09-054 )

SALMAN HAFEZ ( BCS-FA09-111 )

RANA SADAQAT ( BCS-FA09-104 )

QUBAISH ( BCS-FA09-099 )

COMSATS INSTITUTE OF INFORMATION

AND TECHNOLOGY (LAHORE)
Nature and Scope
of Business
 Nature of Business

Literal Meaning: State of being Busy

Technical Meaning: All those activities which are

related to the production and distribution of goods
and Services with the object of earning profit
For Example:
• A Farmer
• A Fisherman
• A Manufacturer
 Activities Excluded from
Business

Ø Social Service
Ø Personal Consumption
Ø Religious and other Activities
Ø Illegal Activities
 Characteristics of
Business
Ø Deals in goods and Services
Ø Economic Activities
Ø Series of Deals
Ø Profit
Ø Element of Risk and Uncertainty
Ø Capital
Ø Creation of Utilities
 Importance of Business
in
the Present Day World

Ø Production of Goods
Ø Distribution aspect of Business
Ø Business Supplies Services
Ø Helped in Raising of Standard of Living
Ø Creation of Customers
 Criticism of Business

Ø Profit Orientation
Ø Polluting Air and Water Pollution
Ø Ignore Human Values
Ø Ignorance of Consumer’s Welfare
So Business is not
mere money

we
chasing but it
should be also
aim in serving the

can
community
Objectives of Business

a)

Economi b) Social c) Human

c Objectiv Objectiv

Objectiv es es

es
 a) Economic Objectives

Ø Profit Earning
Ø Creating
Markets
Ø Technological
Improvements
 b) Social Objectives

Ø Supply of Standard Quality of

Goods
Ø Avoidance of anti-social
practices
Ø Provision of more
Employment
Ø Cooperation with the
Government
Ø Use of National Resources
 c) Human Objectives

Ø Economic well being of

the employee
Ø Social and psychological
satisfaction of employee
Ø Development of human
resource
Ø Well being of socially and
economically backward
people
 Scope of business or
Component of Business
The scope of business is very wide. It covers
activities related to production, distribution of
goods and services with an aim to earn profit.
It divided into two parts……

Business

Industry Commerce
 Meaning of industry
The term ‘Industry’refers to that part of business activity
which is concerned with the extraction, production or
fabrication of products.

v The goods produced by an industry are consumed by

the customer are known as consumer goods.
v If the goods are used for further production of wealth
they are called producers or capital goods.
 Types of Industry

There are many types of industry some are given

below : -

o Extractive Industry
o Genetic Industry
o Constructive Industry
o Manufacturing Industry
o Service Industry
 Types of Industry

Extractive Industry: are those which

extract raise or produce raw materials
from above or below the surface of
earth. E.g. Mining, forestry, agriculture.
Genetic Industry: are those which are
engaged in reproducing and multiplying certain
species of animals and plants E.g. cattle breeding
farms, poultry farms,

Constructive Industry: are those which

are engaged in the construction of building, roads,
dams etc,
 Commerce
It is concerned with the buying and selling
goods. It is also related to the transfer of goods
from the place of production to the ultimate
consumers.
It is divided into two parts :
Commerce

Trade Aids to Trade

 Trade

Trade mean buying and selling of goods. It is the exchange of

goods and service among the buyers and sellers in which
both the parties are benefit.

Types of trade:
 Internal trade
External trade
Wholesale trade
Retail trade
 Aids to Trade

The activities which facilitate in the purchase of goods and

service are called aids to trade.
Some types of trade are
Transport
Insurance
Warehousing
Banking
Advertisement
Mercantile agent
 Problems before
establishing
a new business
Selection of business.
Why are you starting up a business
 Company Structure
 Skills
Funding
Competition
Marketplace
 Problems before
establishing
a new business
Business Plan
Staff
Seek Professional Advice
Location
Selection of staff
Biggest causes of failure
TYPE OF BUSINESS
TYPE OF BUSINESS
 1) SOLE PROPRIETORSHIP

 DEFINITION
CHARACTERISTICS
 SCOPE AND FUTURE
SCOPE IN PAKISTAN

ADVANTAGES
DISADVANTAGES
WHAT IS MEANT BY
ONE MAN?
 DEFINITION

 According to PATERSON:

 A Sole proprietorship is a business unit

whose ownership and management are
vested in one person. The individual assumes
all risk of loss or failure of enterprise and
receives all profits from its successful
operation.
 CHARACTERISTICS

OWNER:
The business is owned by single individual.
MANAGEMENT AND CONTROL:
It is managed by the owner himself.
FINANCE:
The necessary capital to run the business is provided by sole
owner.
RISK:
The proprietor himself bears all the risk.
RELATIONSHIP WITH CUSTOMER:
The sole trader tries to keep good relation with customers.
EASE OF DISSOLUTION:
The sole trading business is as easy to end or
dissolve as is its formation.
 SCOPE AND FUTURE

Sole proprietorship has special appeal

for persons with limited financial
resources.

Being one’s own boss and keeping all

the profits are strong incentives to work
hard and succeed.

Sole trading has special place in our

country and the future of sole
proprietorship is quite bright in
 SCOPE IN PAKISTAN
In the developed and developing countries
included Pakistan the large part of business
is carried on by sole proprietor. The Doctors,
Painters, Plumbers etc operate on small
scale are the sole traders. They are
competing successfully with the products
offered by partnership firms. The total
volume of all business transacted by sole
traders is quite small when compared with
the total volume of all business transactions.
Sole proprietorship is suitable for small but
not for medium or large scale business.

So the future of sole proprietorship is quite

 ADVANTAGES OR
MERITS

EASE OF FORMATION: A person can undertake any

lawful business activity for profit motive easily.
SOLE AUTHORITY: The sole proprietor has full
authority to manage his business as he likes.
SOLE CLAIM ON PROFIT: The sole trader receives full
profits of the business.
CREDIT STANDINGS: If the proprietor has a sound
goodwill and personnel assets then he can enjoy better credit
rating.
MINIMUM LEGAL RISTRICTION: As long as the
proposed business is legal, anyone can organize it
without any special formality.
DIRECT RELATIONSHIP WITH CUSTOMERS: A
 ADVANTAGES OR
MERITS

POWER TO START AND CLOSE BUSINESS: A

sole trader has power to start or close the
business as he likes.
REDUCING CONCENTRATION OF WEALTH: The
sole proprietorship helps in reducing the
concentration of wealth in few hands.
SELF EMPLOYMENT: The sole trading business
provide a business careers to a large number of
persons with small means.
DISADVANTAGEAS OR
LIMITATION

BURDEN OF UNLIMITED LIABILITY

DIFFICULTIES OF EXPANSION
LIMITED MANAGERIAL ABILITY
LACK OF CONTINUITY
OPERATIONAL DISADVANTAGES
LOSS IN ABSENCE
ABSENCE OF SPECIALIATION
 WHAT IS MEANT BY
ONE MAN ?
One man control or
one man
business( also called
sole proprietorship) is
business owned by
one person, managed
and operated for
one’s own profit.
 Is one man control is
best
in the world?
With the advent of industrial revolution,
introduction of machinery, greater
business risk, specialization etc.. The one
man control is no more rule in the world.
The reason is that one man is not big
enough to manage everything i. e
accounts, buying, selling etc. In the
percent age of competition and
technology advancement, the single
proprietor has to seek the aid of other
persons, managers, advisors etc. He now
is one man among many. Hence, The one
TYPE OF BUSINESS
 2) PARTNERSHIP
 Definition
 Type of Partnership
 Characteristics
 Advantages of Partnership
 Disadvantages of Partnership
 Kind of Business Partner
 Partnership Deed or Agreement
 Reconstitution of Partnership
 Registration of Firm
 DEFINATION

A Partnership is
an
association of
two
or more persons
to
 TYPES OF PARTNERSHIP

c) LIMITED
a) GENERAL b) LIMITED
LIABLITY
PARTNERSHIP PARTNERSHIP
PARTNERSHIP
 GENERAL PARTNERSHIP

§ A General Partnership is
an Association of 2 or more
persons with unlimited
liability.
§ It is also called Partnership.
§ General Partnership bears
full personal responsibilities
for all debts and obligations
of the business
 LIMITED PARTNERSHIP

§ A Limited Partnership
consists of at least one
general partner and one or
more limited partners.
 LIMITED LIABLITY
PARTNERSHIP

§ A limited
partnership is
business
structure in
which each
partner or
investor takes on
a level of risk
 CHARACTERISTICS OF
PARTNERSHIP
§ Association of at least two
people
§ Contractual Relation
§ Earning of Profit
§ Mutual Agency
§ Team Work
§ Clear Aims and Goals
 ADVANTAGES OF
PARTNERSHIP

§ Easy to form
§ Large Capital
§ Greater management ability
§ Union of business ability
§ Advantage of secrecy
§ Profit of incentive
§ More Resources and
Expanded Audience
§ audit
 DIS-ADVANTAGES OF
PARTNERSHIP
§ Unlimited liability of
partners
§ Limited life of Firm
§ Frozen Investment
§ Disputes Among the
Partners
§ Possibility misuse of
Recourses
§ Divided Control
§ Lack of Public Confident
 TYPES OF PARTNERS

General Special Other

Partner Partner Partner

Secret
Minor
Partne
Active Sleepin Partne
r
Partne g r
r Partner
Partner
Nomina
In
l
Profit
Partner
Only
 PARTNERSHIP DEED OR

AGREEMENT
 Partnership agreement is a document which is signed by all the
partners and it contains all the matters determining and governing
the mutual rights , duties and liabilities of the partners in the
conduct and management of the affairs of the partnership.
IMPORTANCE
v It forms the basis of formation of the partnership.
v It defines the mutual rights, duties and liability of the partners.
v It helps in minimizing the areas of disputes among the partners.
v It serves as guidepost for the conduct of firms business.
 REGISTRATION OF FIRM
Ø In Pakistan Firm are registered under Act of 1932 and ordinance of
1962. The Registration of Firm is the evidence of the existence of the
Firm with its define laws and attributes.( Partners, liabilities and
finance )
Ø The Registration of Firm is consist of two blocks. First is called
“Submission of Application” and Second one is getting “Certification”.
Submission of Application required Partnership Deed and also defines
the followings key points.
Term of Agreement Benefits of Firm
Benefits of Creditors Income Tax
Benefits of Retiring Partner
 STATISTICS FROM
PAKISTAN
Total operational FIRM’s
or PARTNERSHIP in
Pakistan are 283 which
are Certified by “adas”.
22 Partnership are in
operation out of 97
during year of 2009.
Decline towards the
Partnership is
 STATISTICS FROM
PAKISTAN
IN 2009

95 NEW FIRMS 65 FIRMS ARE

ARE REGISTERED FROZEN
STATISTICS FROM
WORLD
DOMESTIC AND
INTERNATIONAL
PARTNERSHIP
TYPE OF BUSINESS
 COMPANIES
 Definition
 Type of Partnership
 Characteristics
 Advantages of Partnership
 Disadvantages of Partnership
 Kind of Business Partner
 Partnership Deed or Agreement
 Reconstitution of Partnership
 Registration of Firm
 COMPANY

A company is a form of
business organization. It is
a collection of individuals
and physical assets with a
common focus and an aim
of gaining profits. This
collection exists in law and
therefore a company is
considered a “Legal
Person.”
 FORMS OF COMPANY:

A company may be
Corporation
Partnership
Association
Joint-stock company
Trust
Tund
TYPES AND SUB TYPES

Click to edit Master text styles

Second level
● Third level

● Fourth level

● Fifth level
  
TYPES OF COMPANIES

Limited companies
Unlimited companies
 LIMITED COMPANY

A limited company is a
company in which the liability
of the members or subscribers
of the company is limited to
what they have invested or
guaranteed to the company.
 UNLIMITED COMPANY
An unlimited company is a
company in which liability of the
members or subscribers of the
company is not limited to what
they have invested or guaranteed
to the company.
 TYPES OF LIMITED
COMPANY
Limited by shares
Limited by guarantee
 LIMITED BY SHARES
Ø
A company limited by
shares is a company in
which the liability of each
shareholder is limited to the
amount individually invested.

Ø A company limited by the

 TYPES OF LIMITED BY
SHARES COMPANY

Public company
Private company
 PUBLIC COMPANY

Public companies are those

companies whose shares can
be publically traded, often on a
regulated stock exchange.
 PRIVATE COMPANIES

Private companies do not

have publically traded
shares, and often contain
restrictions on transfer of
shares.
 PURPOSE OF COMPANY

The main purpose of the

company is to take money
from the investors and
generate profits on their
investments.
 FEATURES OF
COMPANY
Separate legal entity
Separate property
Limited liabilities
Perpetual succession
Common seal
Registered offices
Right to sue
 DOMESTIC AND
INTERNATIONAL COMPANIES

DOMESTIC
COMPANIES:

Domestic companies
perform domestic
trade. A domestic
trade is exchange of
capital, goods and
 DOMESTIC AND
INTERNATIONAL COMPANIES

INTERNATIONAL
COMPANIES:
International
companies perform
international trade. An
international trade is
exchange of capital,
goods and services
 DIFFERENCE BETWEEN
DOMESTIC
AND INTERNATIONAL
COMPANIES
SCOPE
BENEFITS
MARKET FLUCTUATION
PURVEY
SHARING OF TECHNOLOGY
POLITICAL RELATIONS
 ADVANTAGES OF
COMPANIES

TRADE INCREASE
TAXES COLLECTION
FUND RAISING
 DISADVANTAGES OF
COMPANIES
The expense of forming and registering
The requirement to provide annual and other
return to the ASIC
Public scrutiny of your affairs
Prosecution and heavy fines for failing to
comply with the corporation act;
Scrutiny of director’s activities by the ASIC
Lack of control in day-to-day management of
the company’s affairs.
 STATISTICS FROM
PAKISTAN
Total operational companies
in Pakistan are 51433
approved by “SECURITEIES
AND EXCHANGE
COMMISSION OF PAKISTAN”
and they are also listed in
KSE, LSE and ISE.
97 companies name starts
from alphabet “X” (Minimum)
 DIFFERENT BUSINESS
GROUPS / ALLIANCES
AL-KARAM GROUP
ATLAS GROUP
DEWAN MUSHTAQ GROUP
GUL AHMAD GROUP
HABIB GROUP
HASHOO GROUP
LAKSON GROUP
NISHAT GROUP
 DIFFERENT COMPANIES
IN PAKISTAN
AUTOMOBILE ASSEMBLER
BANKS
CHEMICAL
ENGINEERING CONSULTANTS
FERTILIZER
FOOD AND PERSONAL CARE PRODUCTS
INSURANCE
OIL AND GAS