Spring 2022

INTRODUCTION TO BUSINESS (MGT211)

ASSIGNMENT # 01
Name: SAMEER AHMAD KHAN
VU id: BC210425784

Premise: Secrecy and confidentiality is very important for any form of any business.
Maintaining secrecy would be really important if the owner of a business is afraid to share
trade secrets and financial documents. A sole proprietorship would be most appropriate
for a business in maintaining confidentiality, as only the sole proprietor is opened to all the
secrets. On the contrary, in Partnership mode of business, secrets are opened to all the
partners. The scope of raising capital is relatively high is partnerships as compared to
businesses solely owned by a single person. An individual may start a business as a sole
proprietor. But he may not be able to raise the required capital for his business at his own.
Therefore, he can opt for a partnership form of business, but the secrecy of the new
business will be compromised

Question:
a) Why is secrecy important in any form of business? (5 marks)
b) Should the individual opt for partnership mode of business or stick to sole
Proprietorship? Justify your answer with proper reasons. (5 marks)

Solution a). Why is secrecy important in any form of business?

Secrecy is very important for every form of business whether it will be a sole
proprietorship or partnership. Let’s take an example to understand the importance of secrecy,
let’s take an example of a well running and famous restaurant which taste is so good and have a
lot of customers and their secrecy is their recipe if another restaurant gets their taste, then it
become easy to compete with the famous restaurant.
Secrecy of financial report is also important. Competitors shouldn’t know about the financial
condition of an entity, if they got to know then they will starts giving discount on the same time
when the entity is not in the position to fight back or give discounts.
Secrecy is easy to maintain in a sole proprietorship but its is difficult or close to impossible in
partnership because whenever a partner will leave the entity their secrecy will be leaked with the
partner.
Solution b). Should the individual opt for partnership mode of business or stick to sole
Proprietorship? Justify your answer with proper reasons
One must not stick to sole proprietorship, even partnership have lack of secrecy,
but it also has a lot of different benefits, like if you want to grow your business on a bigger level
then you must need a lot of funds and liability which can be achieved only in partnership.

Now days secrecy is not an issue even in the partnership because there are a lot of laws, Rules
and regulations for the partnership, and these are enough that one can trust and go with the
partnership to get bigger opportunities.