Assignment # 01 mgt211 (Spring 2021)
(A) Why is secrecy important in
business? 5 Marks
(B) Should the individual opt for partnership
mode of business or stick to sole proprietorship justify your answer with
proper reason?
5 Marks
(A) Why is secrecy important in
business?
A general regime of protection of business
secrecy has been established. The law has pursued to define business secrets
and the illicit conducts that undermine it, and facilitate legal action to
protect it and assure that it will not be disturbed on this occasion, in order
to protect business secrets.
1. Fearless and
Insecurity of Loss:- Secrecy helps a business to operate without any state of
insecurity or any kind of fear of any loss.
2.
New Schemes:- Maintaining
secrets from employees may help an employer from the possibility of
jeopardizing a new scheme, idea or plan of a business through leaks to
competitors.
3.
To win from Competitors:-
If the business does not maintain secrecy, competitors may steal ideas and gain
a lead in the market, and this may adversely affect a business.
4.
To gain Loan:- If any
organization will maintain the secrets then organization will easily get the
loan form any institutions and private individuals.
5. Public
Trust:- Secrets in the business are very helpful in getting and keeping the
public trust. People do not go for details if the organizations keep secret
information.
GDPR
The GDPR aims to give more people control over how organizations
use their data, but hefty penalties of up to €20 million have been introduced
for companies that do not comply with the regulations.
There are six main data protection principles that demonstrate
the main responsibilities for organizations. These are as follows:
- Lawfulness, fairness and transparency
- Purpose limitations
- Data minimization
- Accuracy
- Storage limitations
- Integrity and confidentiality
(B) Should the individual
opt for partnership mode of business or stick to sole proprietorship justify
your answer with proper reason?
·
What is a Sole
Proprietorship
·
What is a Partnership
(A) What is a Sole Proprietorship?
As soon as you start doing business by yourself, whether
you accept money to mow your neighbor's yard or you sell your homemade jewelry
online, you have a sole proprietorship. In some states, if you co-own a
business with your spouse, your business is still a sole proprietorship. For
some business entities, like corporations and LLCs, you have to file formation documents with
the state (such as Articles of Organization) to create the business. By
contrast, you create a sole proprietorship as soon as you accept money for your
goods or services, and you do not file any formation paperwork.
When you form a sole proprietorship, although you are the
only owner, you do not have to work alone. You can hire employees, freelancers,
and consultants to help run your business. However, you are the one responsible
for making the decisions for the business and all of the profits and losses
will go to you.
What is a Partnership?
When you and someone else start doing
business with the intent of making a profit, you have a partnership, sometimes
referred to as a general partnership. The partnership might begin with signing
an agreement to work together, or you could have an informal relationship based
on a conversation and a handshake. Your partner could be an individual or a
business, and you can have an unlimited number of partners. As with sole
proprietorships, you do not file anything with the state to form a partnership.
The benefit of a partnership over a sole
proprietorship is that you'll share the responsibilities, resources, and
losses. On the other hand, you also split your profits, and you might face
disagreements over how to run the business. One way to mitigate conflict is to
create a partnership agreement.