Entrepreneurship Unit -5, Notes B.Com 3rd Sem (Hons) Guwahati University

In this Post we have Provided Gauhati University B.com 3rd Semester Entrepreneurship Unit -5 Notes as Per New CBCS Pettern Prescribed by Guwahati University, the given notes are prepared in detail each and every topic covered as per syllabus scroll down and read the all question answer and prepare for your examination :)

ENTREPRENEURSHIP

UNIT-5

Mobilising Recourses

Short Questions Answer

1. Define the following

(i) What is Lead Time?

Ans: Lead time is the amount of time that passes from the start of a process until its conclusion. Companies review lead time in manufacturing, supply chain management, and project management during pre-processing, processing, and post-processing stages.

(ii) What is a Supply Chain?

Ans: A supply chain is a network between a company and its suppliers to produce and distribute a specific product to the final buyer. This network includes different activities, people, entities, information, and resources. The supply chain also represents the steps it takes to get the product or service from its original state to the customer.

(iii) What is a Vertical Merger?

Ans: A vertical merger is the merger of two or more companies that provide different supply chain functions for a common good or service. Most often, the merger is effected to increase synergies, gain more control of the supply chain process, and ramp up business. A vertical merger often results in reduced costs and increased productivity and efficiency.

(iv) What is Cost Synergy?

Ans: Cost synergy is the savings in operating costs expected after the merger of two companies. Cost synergies are cost reductions due to the increased efficiencies in the combined company. Cost synergy is one of three major synergy types, with the other two being revenue and financial synergies.

(v) What is Backward Integration?

(vi) What is Procurement?

Ans: Procurement is the act of obtaining goods or services, typically for business purposes. Procurement is most commonly associated with businesses because companies need to solicit services or purchase goods, usually on a relatively large scale.

(vii) What is a Congeneric Merger?

Ans: A congeneric merger is a type of merger where two companies are in the same or related industries or markets but do not offer the same products. In a congeneric merger, the companies may share similar distribution channels, providing synergies for the merger.

(viii) What is SEC Form F-1?

Ans: SEC Form F-1 is a filing with the Securities and Exchange Commission (SEC) required for the registration of certain securities by foreign issuers. SEC Form F-1 is required to register securities issued by foreign issuers for which no other specialized form exists or is authorized.

(ix) What is SEC Form S-3?

Ans: Form S-3 is a simplified security registration form utilized by businesses that have already met other reporting requirements. The form registers securities with the SEC under the Securities Act of 1933 for U.S.-based companies only.

Companies looking to use the S-3 must have satisfied all reporting requirements of the Securities Exchange Act of 1934 from sections 12 or 15 (d) that follows the assumption that companies seeking to register, have some form of security filed with the SEC.

(x) What is SEC Form S-4?

Ans: SEC Form S-4 is filed by a publicly traded company with the Securities and Exchange Commission (SEC). It is required to register any material information related to a merger or acquisition. In addition, the form is also filed by companies undergoing an exchange offer, where securities are offered in place of cash.

(xi) What is an S-3 Filing?

Ans: S-3 filing is a simplified process companies undergo to register securities through the Securities and Exchange Commission (SEC). This filing is normally done in order to raise capital, usually after an initial public offering (IPO). The S-3 filing can only be used by companies that meet specific, timely regulatory filing requirements.

Also Read;

Entrepreneurship Question Paper 2022 Gauhati University 3rd Sem

SHORT QUESTION ANSWER

2 MARKS

1. What is resource mobilization?

Ans: Resource mobilization refers to all activities involved in securing new and additional resources for your organization. It also involves making better use of, and maximizing, existing resources. Resource mobilization is often referred to as 'New Business Development'.

2.Why is resource mobilization so important?

Ans: Resource mobilization is critical to any organization for the following reasons__

(i) Ensures the continuation of your organization's service provision to clients.

(ii) Supports organizational sustainability.

3. What is meant by sustainability?

Ans: Although sustainability is often identified with having sufficient funds to cover an organization's activities, it is actually a broader concept. There are three fundamental streams of sustainability: institutional, financial and programmatic. Each is vital to the survival of an organization.

4. Give the three areas of sustainability?

Ans: (i) Programmatic sustainability: The organization delivers products and services that respond to clients' needs and anticipates new areas of need. Its success enables expansion of its client base.

(ii) Institutional sustainability: The organization has a strong, yet flexible structure and accountable, transparent governance practices. Its structure and good governance allows it to respond to the shifting priorities of its supporters and to new responsibilities toward its clients, while creating a positive work climate for its staff.

(iii) Financial sustainability: The organization draws on various sources of revenue, allowing it to support its ongoing efforts and to undertake new initiatives.

5. What is Financial Resource?

Ans: The most important element in starting a business is funding. Even the most basic home business incurs a multitude of startup costs, including registering a business name, obtaining a business telephone line and printing business cards.

6. Define Venture Capital?

Ans: Venture capitalists take an equity position in the company to help it carry out a promising but higher risk project. This involves giving up some ownership or equity in your business to an external party.

Venture capitalists also expect a healthy return on their investment, often generated when the business starts selling shares to the public. Be sure to look for investors who bring relevant experience and knowledge to your business.

7. Define Intellectual Resource ?

Ans: Intellectual resource is the intangible value of a business, covering its people, the value inherent in its relationships, and everything that is left when the employees go home, of which Intellectual property (IP) is but one component. It is the sum of everything everybody in a company knows that gives it a compet-itive edge.

8. Define Human Resource?

Ans: The success of an organization is heavily reliant on the talent and strength of its employees. The hiring of experienced professionals with track records of excellence within their area of expertise ensures that the mission and goals of the company will be carried out efficiently and with competence.Strong team members can be recruited using a variety of methods. Staffing agencies and executive search firms specialize in placing talent of all levels within every industry. An alternative is to find employees through referrals from individuals whose judgment is trusted.

9. Define Educational Resources ?

Ans:- Perhaps the greatest thing an entrepreneur can do when establishing a new business is to gain as much educa-tion possible. By understanding his/her competition and gaining an in-depth knowledge of his/her industry, he/she will be better pre-pared to make smarter decisions regarding the direction of his/her firm. Educational resources can be found through professional trade associations that are geared toward his/her industry, local chamber of commerce as well as the Small Business Administration.

10. Define Emotional Resources ?

Ans: Starting a business can be an extremely stressful endeavour for an entrepreneur to undertake. To maintain the sanity as well as stay motivated, it is important to have a support team that can give inspirations and guidance as needed. This team may be composed of friends and family as well as a mentor or pro-fessional group.

11. Define Utilities?

Ans: Utilities means Pleasure or satisfaction (value for money) derived by a person from the consumption of a good or service or from being in a particular place, and for the maximization of which all economic actions are motivated. It is the subjective or psychic return which cannot be measured in absolute or objective terms. Goods or services that have utility for one person may not have for another, and what may have utility for a person at a certain time or place may not have it at another.

12. What Is a Vendor?

Ans: A vendor is a party in the supply chain that makes goods and services available to companies or consumers. The term "vendor" is typically used to describe the entity that is paid for goods that are provided, rather than the manufacturer of the goods itself. However, it is possible for a vendor to operate as both a supplier (or seller) of goods and a manufacturer.

13.What is Lead Time?

Ans: Lead time is the amount of time that passes from the start of a process until its conclusion. Companies review lead time in manufacturing supply chain management, and project management during pre-processing processing, and post-processing stages. By comparing results against established benchmarks, they can determine where inefficiencies exist Reducing lead time can streamline operations and improve productivity, increasing output, and revenue. By contrast, longer lead times negatively affect sales and manufacturing processes.

14. What is Manufacturing Production?

Ans: Manufacturing production refers to the methodology of how to most efficiently manufacture and produce goods for sale, beyond just a bill of materials. Three common types of manufacturing production processes are: make to stock (MTS), make to order (MTO), and make to assemble (MTA). Such strategies have advantages and disadvantages in labor costs, inventory control, overhead, customization, and the speed of production and filling orders.

15. What is a Bottleneck?

Ans: A bottleneck is a point of congestion in a production system (such as an assembly line or a computer network) that occurs when workloads arrive too quickly for the production process to handle. The inefficiencies brought about by the bottleneck often creates delays and higher production costs. The term "bottleneck" refers to the typical shape of a bottle and the fact that the bottle's neck is the narrowest point, which is the most likely place for congestion to occur, slowing down the flow of liquid from the bottle.

16. What is a Supply Chain?

17. How the Flow of Manufacturing Costs Works?

Ans: The flow of manufacturing costs refers to the process of using materials and labor to complete a finished product that can be sold to a customer. A supply chain management system can reduce the cost and complexity of the manufacturing process, particularly for a manufacturer who uses many parts.

For example, a clothing manufacturer may first move raw materials into production, such as fabric, zippers, and other pieces used to make clothing. The manufacturer then incurs labor costs to run machinery and perform other work using the materials. Once the items are completed, they must be packaged and stored until they are sold to a customer.

18. What Is Backward Integration?

Ans: Backward integration is a form of vertical integration in which a company expands its role to fulfill tasks formerly completed by businesses up the supply chain. In other words, backward integration is when a company buys another company that supplies the products or services needed for production. For example, a company might buy their supplier of inventory or raw materials. Companies often complete backward integration by acquiring or merging with these other businesses, but they can also establish their own subsidiary to accomplish the task.

19. What is the Advantages of Backward Integration ?

Ans: Companies pursue backward integration when it is expected to result in improved efficiency and cost savings. For example, backward integration might cut transportation costs, improve profit margins, and make the firm more competitive. Costs can be controlled significantly from production through to the distribution process. Businesses can also gain more control over their value chain, increasing efficiency, and gaining direct access to the materials that they need. In addition, they can keep competitors at bay by gaining access to certain markets and resources, including technology or patents.

UNIT WISE NOTES

1. Introduction to Entrepreneurship

2. Entrepreneurship and Micro, Small and Medium Enterprises

3. Public or Private Systems or Stimulation

4. Source of Business Idea and Test of Feasibility

5. Mobilising Resources

20. What is the Disadvantages of Backward Integration ?

Ans: Backward integration can be capital intensive, meaning it often requires large sums of money to purchase part of the supply chain. If a company needs to purchase a supplier or production facility, it may need to take on large amounts of debt to accomplish backward integration. Although the company might realize cost savings, the cost of the additional debt might reduce any of the cost savings. Also, the added debt to the company's balance sheet might prevent them from getting approved for additional credit facilities from their bank in the future.

21.What is Vertical Integration?

Ans: Vertical integration is a strategy whereby a company owns or controls its suppliers, distributors or retail locations to control its value or supply chain. Vertical integration benefits companies by allowing them to control process, reduce costs and improve efficiencies. However, vertical integration has disadvantages, including the significant amounts of capital investment required.

Netflix is a prime example of vertical integration. The company started as a DVD rental business before moving into online streaming of films and movies licensed from major studios. Then, Netflix executives realized they could improve their margins by producing their own original content. Today, Netflix uses its distribution model to promote its original content alongside programming licensed from studios.

22. What is a Supplier in a Business?

Ans: A supplier is a person or business that provides a product or service to another entity. The role of a supplier in a business is to provide high-quality products from a manufacturer at a good price to a distributor or retailer for resale. A supplier in a business is someone who acts as an intermediary between the manufacturer and retailer, ensuring that communication is forthcoming and stock is of sufficient quality.

23. Gibe two important elements of a supplier ?

Ans:1. Compliance with local laws: Suppliers should comply with all relevant laws and standards, including human rights protection and child labor.

2. Equitable transactions from all retailers: Suppliers must provide equal opportunities for all retailers to do business with them. A retailer should not be rejected due to their location, or any other reason.

24. What is Supplier Relationship Management?

Ans: Supplier Relationship Management is the process of planning and managing all relationship with vendors that supply any products or services to a business. This may involve raw material suppliers, utility suppliers or cleaning services supplier It is important to manage these relationships so a business can ensure the efficient supply of products and services for the company.

Creating and maintaining a Supplier Management Process that explicitly outlines the route to take to manage a supplier is important so that a company can choose the right suppliers that suit the business needs. The Supplier Management Process goes further than just choosing the right vendor, it outlines the process of building trust with suppliers and improving on the services provided by them.

25. What are the Benefits of Supplier Relationship Management?

Ans:1. Reduced Costs: Managing supplier relationships means that suppliers stay with the company for a long time and churn is kept to a minimum. Working with one or two suppliers who can provide many different materials is better than having many different suppliers. This means a company can work on improving the supplier services and reducing costs.

2. Foster Innovation: When a business works closely with a supplier can work tog to lead innovation. Through this, both parties can improve their offering exponentially.

26. What is Supplier Relationship Management Best Practices?

Ans:1. Build Lasting Relationships: If a company intends to use a vendor more than once it should strive to build a lasting relationship whereby they can pick up the phone and talk to their supplier easily. This relationship will ensure that they will understand the full capabilities of their suppliers so the business knows when they are asking too much from their suppliers. Building a strong relationship will ensure that their suppliers will look after the businesses needs in the future before others.

2. Invest in Technology: With software for everything today it is easy to find the right supplier management software for a company that is tailored to their explicit needs. With this technology, companies can track suppliers, create a dashboard to have a snapshot of how everything is doing, and quickly discover pain points through simple to read data.

27. What is the difference between a Supplier vs Distributor?

Ans: As highlighted above a supplier supplies a product or service to another entity, usually a distributor who will sell it to a wholesaler or retailer. Suppliers can also be the manufacturer of the product and the distributor of the product. More often they cannot take on the additional workload of distribution so they outsource this activity to another company. A distributor, on the other hand, sources products from suppliers and sells them to a wholesaler or retailer at a slightly higher price to make a bit of profit for themselves. The main difference between these two groups is that one works more closely with the manufacturer (the supplier), and the other works closely with the retailer (the distributor)

28. Mention two types of suppliers?

Ans:1. Services: These include suppliers of electricity, water, telephones, IT, email, website hosting, stationery, facilities, transport, etc. 2. Sub-contractors: If you're in a trade business, these will include other tradespeople. If you're a consultant, training provider, etc, these will include other consultants, trainers, etc. You might contract these people direct or through an agency.

29. Mention two importance of suppliers?

Ans: 1. Supplier relationship is everything you do with suppliers and in your supply market, not related to a specific contract, It is a discipline of working collaboratively with those suppliers that are vital to the success of your organization, to maximize the potential value of those relationships.

2. Supplier relationship is critical to any organization while suppliers can directly impact the financial performance of a buying enterprise, as they influence product development costs, inventory levels, manufacturing schedules and the timelines of delivery of goods and services.

30. What is a Customer?

Ans: A customer is an individual or business that purchases another company's goods or services. Customers are important because they drive revenues; without them, businesses have nothing to offer. Most public-facing businesses compete with other companies to attract customers, either by aggressively advertising their products or by lowering prices to expand their customer bases,

Guwahati University B.com 3rd Semester Entrepreneurship Complete Notes | thetreasurenotes.in

31.Mention two Customer Importance in Marketing?

Ans:1. Marketing Considerations: Some of the considerations to takento account when marketing to your customers are honesty, integrity and clarity. Keeping consumer needs in mind is also an integral part of effective marketing. Sneaky advertising campaigns can generate quick sales, but those sales will falter as consumers realize they've been duped. Selling a good product marketed with integrity brings back customers. To do this, a company needs to build customer confidence in its product over time. Customer confidence is what brings consumers back to your product and ensures long-term success.

2. Customer Service : Considering customer needs during the development and promotion of a product is not the only way to emphasize customer needs. Customer considerations after the product has been marketed are important as well. Customer service and interaction with the consumer after the product has been sold not only build strong relationships with the consumer but offer companies valuable information

that will help to design more effective marketing efforts in the future.

32. What is Contract Management?

Ans: Contract management or contract administration is the management of contracts made with customers, vendors, partners, or employees. The personnel involved in contract administration required to negotiate, support and manage effective contracts are often expensive to train and retain. Contract management includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions, as well as documenting and agreeing on any changes or amendments that may arise during its implementation or execution. It can be summarized as the process of systematically and efficiently managing contract creation, execution, and analysis for the purpose of maximizing financial and operational performance and minimizing risk.

34.Give two components of Contract Management?

Ans:1. Version Control: You have to have a system for managing the different versions of draft contracts. Simply creating new file names in a file on the network isn't enough. You need a document control system so that everyone involved with the contract is working on the same version.

2. Secure Access: Your contracts have a lot of sensitive and confidential information. A data breach could also put you in a breach of contract situation with your strategic partners.

Guwahati University B.com 3rd Semester Entrepreneurship Complete Notes | thetreasurenotes.in

LONG QUESTION ANSWER

1. Explain five Types of Resource Mobilization for Startups?

Ans: 1. Financial Resource: The most important element in starting a business is funding. Even the most basic home business incurs a multitude of startup costs, including registering a business name, obtaining a business telephone line and printing business cards

2. Intellectual Resource: Intellectual resource is the intangible value of a business, covering its people, the value inherent in its relationships, and everything that is left when the employees go home, of which Intellectual property (IP) is but one component. It is the sum of everything everybody in a company knows that gives it a competitive edge.

The term is used in academia in an attempt to account for the value of intangible assets not listed explicitly on a company's balance sheets. On a national level intellectual capital refers to National Intangible Capital NIC.

A second meaning that is used in academia and was adopted in large corporations is focused on the recycling of knowledge via Knowledge management; Intellectual capital is used in the context of assessing the wealth of organizations. Understanding the intellectual capital in an enterprise allows leveraging of its intellectual assets.The start-ups also require this resource and can mobilize it from within the close circle.

3. Human Resource: The success of an organization is heavily reliant on the talent and strength of its employees. The hiring of experienced professionals with track records of excellence within their -area of expertise ensures that the mission and goals of the company will be carried out efficiently and with competence.

Strong team members can be recruited using a variety of methods. Staffing agencies and executive search firms specialize in placing talent of all levels within every industry. An alternative is to find employees through referrals from individuals whose judgment is trusted.Though initially the start-ups cannot do a large hiring, but whatever human resource, they hire, must be "High Potential Individuals".

4. Educational Resources: Perhaps the greatest thing an entrepreneur can do when establishing a new business is to gain as much educa-tion possible. By understanding his/her competition and gaining an in-depth knowledge of his/her industry, he/she will be better pre-pared to make smarter decisions regarding the direction of his/her firm.

Educational resources can be found through professional trade associations that are geared toward his/her industry, local chamber of commerce as well as the Small Business Administration.

5. Relational Resource: It consists of such elements as customer relationships, supplier relationships, trademarks and trade name which have value only by virtue of customer relationships, licenses, and franchises. In fact relational resource is separate from human and structural resource and therefore, it indicates its immense im-portance to an organization's worth.

The value of the relationships a business maintains with its customers and suppliers is also referred as goodwill, but often poorly booked in corporate accounts, because of accounting rules.

HIPOs, as they are called, high potential employees are the ones who have exceptional potential, ability and aspiration for successive leadership positions.

2.Explain some simple ways to solve or minimize a startup problem?

Ans: (i) Define the Problem Clearly: Many executives like to jump into solution mode immediately, even before they understand the

issue. In some cases, a small problem can become a big one with inappro-priate actions. In all cases, real clarity will expedite the path ahead.

(ii) Pursue Alternate Paths: Remember, there are some things that you can do nothing about. They are not problems; they are merely facts of life. Often, what appears to be a problem is actually an oppor-tunity in disguise. Even if it does not turn into an opportunity, the entrepreneur must take an alternative course.

(iii) Identify the Cause of the Problem: Find the root cause the problem, rather than treating a symptom because if the root cause is not understood, the problem will likely recur, perhaps with different symptoms.

(iv) Identify Multiple Possible Solutions: The more possible solutions you develop, the more likely you will come up with the right one. The quality of the solution seems to be in direct proportion to the quantity of solutions considered in problem solving.

(v) Make a Prompt Decision: Select a solution, any solution, and then decide on a course of action. The longer you put off deciding on what to do, the higher the cost, and the larger the impact will be. Many start-ups take too long to decide & that becomes a reason for the failure.

(vi) Acknowledge and Correct: Instead of getting offended or embarrassed when your product does not do well or someone bad mouths your brand in attempt to elevate their own, look at the problem as a direct route to connect with your customers or competition. If your customers are unhappy, correct the problem.

Guwahati University B.com 3rd Semester Entrepreneurship Complete Notes | thetreasurenotes.in

3.Explain the Effect of the Pre incorporation contract ?

Ans: 1. The company cannot be sued on the preliminary Contracts even though when it comes into existence and takes the benefit thereof. The company cannot be sued for those expenses, which are incurred before its incorporation because it was not in existence when the expenses were actually incurred.

2. The company is also not a position to sue on the preliminary Contract.

3. The person who acts for the intended company will be presently liable to the vendor, even if the company purports to ratify the agreement, unless the agreement provides that__

-His His liability will come to an end it the company adopts the agreement.
-Either party may cancel the agreement if the company does not adopt it within a specified time.

4. As per section 15 and 16 of the specific relief Act, 1963, a pre incorporation contract can be enforced against the company, if it is warranted by the terms of incorporation and it is adopted by the company. In such a type of cases the director has no discretion in the matter.

4. Explain what is included in preliminary contract ?

Ans: 1. The names and addresses of the purchaser and the vendor; 2. The description of the apartment (its address and cadastral designation); 3. The identification (if needed) of the private parking and storage portions, and their cadastral description; 4. The purchase price offered and, if applicable, the terms of payments. 5. The superficial area of the private portions; 6. The identification and the ID number (if applicable) of the parking and storage space(s) allocated as (a)common portion(s) for restricted use; 7. The agreed price and, if applicable, the terms of payment; 8. The amount(s) of any deposit(s); 9. Your intent or not to obtain a hypothecary loan to finance the purchase, along with the particulars of such financing; 10. Any movable property or items included in the purchase price (for example: appliances, curtains and light fixtures); 11. The rented devices or apparatus; 12. Any conditions suspending the contract; 13. The date of taking possession of the unit; 14. The date scheduled for the signing of the deed of sale; 15. The name of the notary before which the deed of sale is to be signed; 16. The term of enforceability of the preliminary contract, meaning the date and the precise hour after which it will become null and void; 17. The signature of both parties.

5. Explain the key terms to know for vendor contracts?

Ans: 1. Proprietary & confidential info: It is extremely important to consider proprietary and confidential information before the start of a relationship. Determining ownership scope of foundational materials, resulting work product, and the attendant rights, as well as obligations to safeguard that information and those rights, will have a material impact on costs and pricing. Companies commit significant resources to developing proprietary information and attempting to protect its confidentiality. Due to the large number of middleware (platforms, Oses, software developers, ad networks, cellular carriers), mobile, social, cloud and big data applications and services are gathering, storing, distributing and modifying a rapidly increasing amount of digital proprietary information and assets. Sadly, unauthorized access, disclosure, misuse and conversion of confidential and proprietary information is an unfortunate reality for many firms.

2. Price and payment: One of the first things they teach you in Law School Contracts class is that price is almost always negotiable and reflects what a willing buyer agrees to pay a willing seller. Obviously, as the size, scope and value of a project or series of projects increases, so does the price structure, including the room to adjust some pricing. Pricing risks should be mitigated by including caps for increases in license fees and costs of labor, materials, enhancements, upgrades.

Negotiating payment terms accounts for the "time value of money" meaning that whoever in the relationship holds the money gets the benefit and leverage. Payment terms for services may be "Net 30," while software licenses may be pre-paid, in full, in advance for a year or more. What you lose by a shorter payment term, you want to be offset by paying a reduce price. When fees are prepaid, the risk of non fulfillment should be addressed in the termination and remedies section.

3. Changes in scope and deliverables: It is inevitable that a need to change or modify the scope of services performed or the nature of the deliverables provided. This section should be considered carefully to provide a clear set of exceptions and a mechanism for addressing certain changes that are likely to be expected given the nature of the services performed or software licensed.

A good place to start is agreeing on a detailed budget with items, costs, deadlines. Address elements within the scope that require licensure or additional regulatory compliance verification. Built-in approval process and authority will streamline ministerial changes.

4. Termination and remedies: Every time I look at an agreement for services such as software development, data licensing, or even mergers and acquisitions, the first question I ask is can we get out of this contract if we have to? If so, how, and under what circumstances. For example, unilateral immediate termination for breach of material obligation sounds great, unless you've already pre-paid for two (2) years of services. Termination rights should be crafted with the idea of honoring the value in the original bargain. This is not to say, however, that egregious conduct should not be punished. Because contract law rights and remedies vary by state, it is important to understand the limitations in any of the states in which you operate. Shockingly, there are 47 different state data breach notification laws and, in some cases, federal requirements as well. Most states recognize many types of "monetary" damages including consequential, incidental, special, punitive, exemplary, indirect, and lost profits. However, states may differ on when consequential damages can be recovered (they were foreseeable) versus what kinds of damages are consequential.

In addition, you should consider the need for non-monetary "equitable" relief that may come in the form of court restructuring of an agreement, or injunctive obligations. Although injunctive relief has become the principal remedy for breach of obligations of confidentiality and non-disclosure, enforcement has been primarily confined to preventing the continued misuse of confidential information and not recovery of materials copied from confidential and proprietary information.

5. Disclaimers and indemnifications: Disclaimers. One of the most important functions of a contract is to reduce uncertainties and mitigate risks. That is why almost all contracts contain "Disclaimers" that limit liability. Although they may seem like densely-worded, "boilerplate" provisions, and often overlooked, these provisions broadly affect a party's ability to bring a claim, show liability, and prove damages that can be recovered. It is important to note that enforcement of limitation of liability provisions vary from state to state. The general rule in contract law is that in the commercial context, many states have found these clauses to be a mere shifting of the risk and enforce them as written.

In general, Disclaimers" are good where scope and amount of liability are uncertain, but Not as good in construction related contracts. Scope is often affected by relative bargaining power. Since the terms "indemnify," "hold harmless," and "defend" have distinct and separate meanings, consider using collective definitions. Caps. Parties can and typically do agree in their contract that liability is capped at some dollar amount. If liability exists and if damages can be proved, then the aggrieved party recovers those damages, but only up to the agreed cap. Sometimes these are mutual; other times they are one-sided. Sometimes the cap is a fixed sum (e.g., "the amounts paid for the services"). Other times, the parties may choose to tie the cap to the type of harm, (e.g.personal injury, property damage, violations of confidentiality obligations). In more sophisticated contracts, "baskets" protect a party by providing a dollar threshold that aggregate losses must meet before it is liable to the other. Baskets can be tipping baskets, meaning that once the basket is "full," the obligated party must indemnify the other from the first dollar of the its losses, or deductible baskets, meaning that the indemnification covers only claims above the threshold amount.

Guwahati University B.com 3rd Semester Entrepreneurship Complete Notes | thetreasurenotes.in

5. What goes into a Vendor Contract?

Ans: The key elements that your agreement should contain are the cost or price, services or products provided, what happens if something goes differently than planned, and the dates for delivery. An agreement is hammered out so that, ideally, the consequences to be suffered for any possible scenario will be spelled out specifically. So, more specifically, you need to name the supplier and yourself as parties to the contract. The next step is to describe in detail the goods or services to be provided under the vendor contract and the terms of delivery or term if a service is the subject of the agreement. Then, you need to agree on the price and capture that in your agreement, to include any specific payment types expected and when the payment or payments are due. If there is any concern for privacy, then those terms should be captured in your this agreement. Next, you should include any specifics on how or when the contract can be terminated (i.e., must have 30 days notice and what happens if one of the parties does not adhere to the terms of the agreement, is there any penalty?). And if you prefer mediation or arbitration as a solution should one party breach the agreement, then a paragraph spelling out the way to settle the differences should be negotiated. Finally, the agreement should be signed and dated by all parties.

6. Explain the types of Vendor Contracts?

Ans: There are many types of vendor contracts, each with their own advantages and disadvantages. Examples of such contracts include:

1. The Fixed Price Contract: Also known as the lump sum contract, this contract stipulates a fixed price will be paid for a well defined product. Such contracts give the buyer a fixed price for the product without overruns, although the price may be higher to compensate for unknown factors and risks on the part of the seller. This type of contract is used when there is little to no uncertainty in the product or work being offered.

2. The Cash Reimbursable Contract :Also known as a cost disbursable contract, this contract reimburses the seller for their work in addition to offering them a fee that represents their profit. Sometimes certain incentives must be met for the fee to be paid, such as the task being completed ahead of schedule or under budget. This contract is used when the scope of the work is uncertain or there is more risk involved.

3. The Time and Materials Contract: This is usually used when labor hours are used to measure the service being offered. In these contracts, an hourly rate will usually be specified for the contractors, experts, or outside support being hired.

4. The Letter Subcontract: This may be used for time and materials work when the job is so large it must be started before all the details of the contract are defined in order have it completed on time. This contract defines a percentage of the work that may be completed during the letter subcontract phase, which is usually not more than 40%.

5. The Indefinite Delivery Contract: This contract is useful when a production schedule or product quantity cannot be easily defined, although a range from minimum to maximum in quantity or time usually is stated. These are often employed when multiple projects must be performed at once or over a time period. Then a master agreement will define the overall project to be completed, leaving leeway regarding some of the finer details, which are in turn detailed in smaller work orders.

6. The Distribution Agreement Contract: This is usually made between a vendor or manufacturer and a distributor, and is used when one needs to get a product distributed to customers. The contract will define when, where, and how the distribution will take place, as well as if it is to be an exclusive or non-exclusive deal.

7. Explain the various Tips for Vendor Contracts?

Ans: Before signing a vendor contract, or any contract, for that matter, it is important you understand what you are signing. Likewise, it is also important that you have negotiated a contract that will give you the best deal possible. Some tips to ensure both include

(i) Being sure that the project scope is clearly defined. To achieve this, the project length, deadlines, milestones, format, constraints, assumptions, acceptance criteria, performance monitoring criteria, responsibilities, and roles should all be clearly stated in the contract.

(ii) Breaking projects into smaller ones rather than have them be governed by one large contract. Thus, when one phase of the project is done, a new contract can be made that is better suited for what is needed at the time.

(iii) Determining a client review schedule for milestones met in a project, as well as a performance reporting and monitoring process.

(iv) Determining what resources and support will be needed tocomplete a project, such as subject matter experts, facilities, and equipment.

(v) Using the best practices for whatever industry you are in, such as the Iterative Development Process or Rational Unified Process, in the case of software development.

(vi) Determining what actions may bring about project termination, what responsibilities each party will have should a project be terminated, who will own the product (if there is one) at the time of termination,and what the contract closure procedures will be.

8. Explain the important clauses that you must include in your vendor agreement?

Ans:1. Goods and Services: If you're purchasing raw material from the vendor for your business, then the vendor agreement must specify the kind, quality and quantity of goods purchased from the vendor. Similarly, if you're availing services from a vendor, then the startup lawyers in Delhi must state the type of service you'll be requiring in the agreement. It should also include the standard by which the service will be performed by the vendor.

2. Payment: The best startup lawyer in Bangalore must include the payment clause in the agreement. This clause specifies the structure of payment that the vendor will receive in return for the goods and services that they deliver. The payment structure must contain the amount to be paid, time period for the payment and information about any advance payment made by your business.

3. Term: The vendor agreement must specify the duration of your business relationship with the vendor, i.e. the time period for which the vendor will provide their services or deliver goods to you. Usually, a vendor's agreement is valid for a fixed term after which it needs to be renewed. The startup lawyer in Chennai must include the clause relating to the term for which the agreement is valid. It must also contain the provision for termination of the agreement before the expiration of the term in case you or the vendor wish to terminate the contract by giving a notice. This gives a certain amount of flexibility to the agreement in case any of the parties want to discontinue it.

4. Warranties: Warranties that the vendor has agreed to provide to your business must be stipulated in the vendor agreement. Warranty includes exclusivity as a customer for a particular product or service, warranty against infringement of your business's IPR, warranty regarding the vendor's ability to avail the services or goods, etc.

5. Liability: The liability clause the vendor's and your liability The liability clause must limit your liability your liability in case of non payment or delay in delivery due to vendor's negligence or fraud. This clause enables your business to claim damages if the vendor's actions cause damage to your business.

6. Dispute Resolution: The startup lawyer in Kolkata must include the dispute resolution method in the vendor agreement, that you and the vendor want to implement in case of a dispute. For instance, if the dispute resolution will be through Arbitration, then the agreement must specify the seat of Arbitration. Also, the laws applicable to both must be mentioned along with the court that will have jurisdiction in case of a court dispute.

9. Explain the primary benefits of adding a contract management strategy?

Ans: 1. Reduce Administrative Overhead: With a centralized log of your hardware assets and contracts, time spent sifting through contracts by internal teams and management is heavily reduced, in turn giving management the opportunity to allocate resources elsewhere.

2. Long-Term Discounts: Companies in good standing with vendors can earn additional discounts.

3. Immediate Cost Savings: By taking unused systems, phone, machines and any other equipment that is no longer being used off of outdated contracts and warranties and placing only active ones on contracts, businesses see an immediate savings on monthly and annual fees, as well as service fees and productivity losses associated with "unused" hardware.

4. Central Visibility: Know exactly what is happening with your

contracts at all times, monitor timely equipment and contractual data and gain an accurate picture of your assets, all via a centralized dashboard.

5. Direct Vendor Communication : Fully managed software means you have an expert between your company and the vendor, saving time internally and ensuring that communication is efficient and accurate.

Guwahati University B.com 3rd Semester Entrepreneurship Complete Notes | thetreasurenotes.in

10. Explain the Benefits of Contract Compliance in Vendor Management Solutions?

Ans: 1. Monitoring Performance: Contracts are typically administered on both sides of the contractual relationship by department head, legal team, AP, contract manager or outside 3rd Party as with LIMITLESS. The contract manager or VAM (Vendor Account Manager) serves as the point person for the contract while it remains active. On the client side, the contract manager monitors the vendor's performance, conducting site visits and inspections, and ensuring that the vendor is following the work plan that was submitted with the vendor's bid for the job. On the vendor management side, the LIMITLESS VAM manages the paperwork and handles communication with the client, keeping him apprised of progress towards goals, submitting requests for payment when milestones are reached and informing her or him of any problems.

2. Budget Control: Contract management also largely involves budget control. The VAM keeps an eye on the contract guidelines. If invoicing goes over the budget that the vendor submitted as part of its bid for the contract, internally the contract manager works to develop a budget modification or an alternative solution to the problem, externally the VAM works to stay "in front" of the contract negotiation or flaw to ensure best outcomes. While the tradition is normally to manage contracts manually through folder and file cabinet storage, the practice is filled with inefficiencies that can only detract from an organization's overall efficiency. Integrating with an automated contract management system and service will help free up countless man hours and automate countless processes associated with managing a contract, thus creating more value for a company and meeting compliance requirements.

3. Reporting: A significant aspect of contract management and compliance is reporting. As with LIMITLESS's VMS software Contract Management uses the reports that a vendor is required to submit periodically to ensure adequate progress is being made towards performance targets. Often, these reports are tied to a vendor's payment schedule. Vendors typically submit performance and financial reports to assist with contract management.

4. Dispute Resolution: Another significant part of contract management is establishing a procedure for dispute resolution. Contracts can span multiple years. During that time, disagreements may arise regarding the best ways to fulfill contractual obligations, especially if underlying circumstances have changed. Agreeing to dispute resolution procedures in advance and allowing a contract manger to mediate the process ensures that the work does not stop even while the issue is litigated in court.

5. Evaluation : An important part of the VAM's role for our clients contract compliance is performance evaluation. An evaluation procedure informs the vendor of the objective standard that will determine if the company has met its contractual obligations. Further, evaluation allows the client to determine if the vendor's performance merits hiring the company again in the future.

6. Auditing: Contracts that have been fully performed still require management. One area which is extremely important to watch is the auto-renewal aspect of contracts, as these often time cause companies 50,000 of rupees not re-evaluating the terms and rates which can be affected in this automated process. Many types of organizations retain the power to audit a contract years after the contract was closed to ensure that payments were made correctly to eligible parties and work was completed according to standards. A contract manager will often finalize the work on a completed contract by ensuring that the contract is completely documented and audited.

11.Explain the major elements in the OCC guidelines?

Ans: 1. Planning: Source One can establish a program that outlines supplier risk management activities that are commensurate with regulatory guidance. This includes matching governance and activities for vendors who perform critical banking activities or present significant reputation or regulatory risk.

2. Third-Party Due Diligence and Selection: We can help you select the proper supplier for your bank or Federal savings association, to ensure the selected third party has their own risk management and control processes in place.

3. Contract Negotiation: We can negotiate a contract with the supplier, including defining the responsibilities, costs, audit rights, information security, disaster recovery, and confidentiality clauses needed to reduce risks.

4. Monitoring: Source One can provide the tools, KPIs, processes, and people to ensure suppliers are delivering on their contractual obligations and processes remain within the bank's risk tolerance.

5. Termination: We can develop a contingency plan for supplier termination to help minimize the risk during the transition - whether planned or unplanned exit.

6. Roles/Responsibilities: We can define the roles for both you and supplier so that risk management processes are implemented, and both parties are held accountable across all channels.

12. What are the main characteristics of banker's acceptance?

Ans: There are three main characteristic features that determine this financial instrument

(i) Credit quality : Credit quality is one of the chief financial criteria that are used when it's necessary to evaluate the investment quality of a bond or its diverse forms. Credit quality is a notion that gives investors an idea of the worthiness or default risks they will have to face when investing in a bond. When we speak about a banker's acceptance, we mean the profit or the risks the bank will have to face in case it accepts the offer and steps in an agreement or a contract as the third side.

(ii) Marketability: Marketability means that this financial instrument can be sold. Since it's a negotiable document with a short term validity, it can be sold to third persons just as any other instrument of the financial market. In case a bank has a brilliant reputation and is known for its flawless ethic practice, many lenders will be happy to accept the offer.

(iii) Liquidity: Liquidity is the ability of assets to be sold at a good price. Some assets possess high liquidity, and others are lower on the ranking. The faster and easier the asset can be converted into money considering its full value, the higher its liquidity is.

13. How does banker's acceptance work?

Ans: As a rule, big, especially international contracts are signed in such a way that there's a certain time, within which everything should be paid. The bank, which agrees to guarantee one's side's finance, makes a kind of research of this side's financial movement. In simpler words, the bank watches how the company's finance is moving in and out of its accounts. It is called a preliminary estimation of the client's capacity to pay.In case the bank discovers whatever suits it in the financial matters of the client company, it agrees to issue a sort of document. It will be the mentioned banker's acceptance. This document will guarantee that in case the client has no or not enough funds on the account by the due date, the bank will pay the needed amount out of its own funds.

It is possible to receive such a favor from the bank only after it evaluates the client's capacity to pay and the future possibility of returning the debt. The bank will also need all the purchase and transportation documents and demands confirmation that all the needed payments are made.

So, to recapitulate all the facts mentioned above, it's possible to say that such an agreement between a bank and a company, which participates in a financial operation, is a means of making the other side of the operation sure that the goods or services will be paid for on a due date. It helps reduce risks for both sides of the financial operation and also optimize the flow of documentation. As well, the one who pays can use the reputation of the bank to provide guarantees of payment, and it can play a big role.

Guwahati University B.com 3rd Semester Entrepreneurship Complete Notes | thetreasurenotes.in

14. Explain the Positive and negative sides of the acceptance from a bank?

Ans: Positive sides of the acceptance from a bank include

1. Smaller financial risks: The reputation of a bank plays a huge role when a seller is reluctant to sell something to a buyer who still has no big positive reputation. In such a case, a guarantee from a bank ensures the seller that everything will be paid and that the buyer is worth trust.

2. Bigger possibilities: Again, it's the matter of a reputation because a buyer who is backed by a known and respected bank can attract more from sellers and a business with a guarantee from a bank can receive better investments.

3.A very low cost: The guarantees from a bank are worth something. However, the interest rate is usually very low,' and it's well worth the opportunities you receive in return. The cost will hardly influence your profits a lot, but you will receive a new partner, a whole bank.

4. No payments in advance: If you are backed by a bank, nobody will demand advance payment. You will be too reliable for all this stuff.

On the other hand, you will have a chance to use the funds as due before you need to pay.

Negative sides of such a choice

1. Financial analysis :The bank you've chosen will never make any deal with you until they check you through and through. They will take all your skeletons out of chests, and thus you need to be absolutely clear before you turn to them with such an offer.

2. Suitability: Banks tend to be very picky when it comes to offers like this. They are reluctant to make any agreements of this type when they see a business with a very low-income margin-nothing to say if you are loss-making.

3. Collaterals: Many banks prefer to reinforce their own security with the help of collateral. The fees you pay may be not enough, and the bank will want your movable assets. It can sometimes be a huge blow on a company that's already unsteady or too fragile.

15. Explain the importance of Customer?

Ans: 1. Psychological Considerations: The psychological makeup of consumers plays a crucial role in developing a product and a marketing campaign that identifies and addresses consumer needs. According to Lars Perner, assistant professor of clinical marketing at the University of Southern California, some of these considerations include how consumers "think, feel, reason and select between different alternatives." These considerations can be influenced by environment, such as culture, family and media. The purpose of marketing research is to identify these variables and to incorporate them into the campaign.

2. Marketing Considerations : Some of the considerations to take into account when marketing to your customers are honesty, integrity and clarity. Keeping consumer needs in mind is also an integral part of effective marketing. Sneaky advertising campaigns can generate quick sales, but those sales will falter as consumers realize they've been duped. Selling a good product marketed with integrity brings back customers. To do this, a company needs to build customer confidence in its product over time. Customer confidence is what brings consumersback to your product and ensures long-term success.

3. Word of Mouth: Underestimating the power of customer word of mouth is detrimental to your success. Consumers like to talk, whether they are talking about a product they enjoyed or a product that left them wanting. Word of mouth has a snowball effect, particularly in an age when fast worldwide communication is common. Your company can't afford not to consider how quickly its product and reputation can be badmouthed or blacklisted. This is why marketing a product honestly and with integrity is important.

4. Customer Service : Considering customer needs during the development and promotion of a product is not the only way to emphasize customer needs. Customer considerations after the product has been marketed are important as well. Customer service and interaction with the consumer after the product has been sold not only build strong relationships with the consumer but offer companies valuable information that will help to design more effective marketing efforts in the future.

VERY LONG QUESTION ANSWER

10 MARKS

1. Explain the various Types of Resource Mobilization for Startups?

Ans: Any startup would need all of the following resources, though the financial resource may be considered most important (i) Financial Resource: The most important element in starting a business is funding. Even the most basic home business incurs a multitude of startup costs, including registering a business name, obtaining a business telephone line and printing business cards. Financial resources can be obtained from a variety of sources, the easiest being from__

(a) The personal accounts of the company's founder(b) Alternatively, loans and lines of credit may be granted from financial institutions (c) Friends and relatives (d) Private investors In addition, many grants are offered from private and publicsources to entrepreneurs of all demographics and personal situations.

(ii) Intellectual Resource: Intellectual resource is the intangible value of a business, covering its people, the value inherent in its relationships, and everything that is left when the employees go home, of which Intellectual property (IP) is but one component. It is the sum of everything everybody in a company knows that gives it a compet-itive edge.The term is used in academia in an attempt to account for the value of intangible assets not listed explicitly on a company's balance sheets. On a national level intellectual capital refers to National Intangible Capital NIC. A second meaning that is used in academia and was adopted in large corporations is focused on the recycling of knowledge via Knowledge management; Intellectual capital is used in the context of assessing the wealth of organizations. Understanding the intellectual capital in an enterprise allows leveraging of its intellectual assets. The start-ups also require this resource and can mobilize it from within the close circle.

(iii) Human Resource: The success of an organization is heavily reliant on the talent and strength of its employees. The hiring of experienced professionals with track records of excellence within their area of expertise ensures that the mission and goals of the company will be carried out efficiently and with competence.

Strong team members can be recruited using a variety of methods. Staffing agencies and executive search firms specialize in placing talent of all levels within every industry. An alternative is to find employees through referrals from individuals whose judgment is trusted,Though initially the start-ups cannot do a large hiring, but whatever human resource, they hire, must be "High Potential Individuals". "Teams should be able to act with the same unity of purpose and focus as a well-motivated individual."- Bill Gates.

(iv) Physical Resource: Whether a small home business or a retail operation with multiple locations, every organization must have the appropriate physical resources to survive. This includes a proper workspace, working telephone line, adequate information systems and effective marketing materials. This aspect of business planning can be one of the costliest. As such, it is important for an entrepre-neur to realistically assess his needs before making any purchases. Most of the start-ups have had the history of starting the operations from home, garage of a very small place initially.

(v) Educational Resources: Perhaps the greatest thing an entrepreneur can do when establishing a new business is to gain as much educa-tion possible. By understanding his/her competition and gaining an in-depth knowledge of his/her industry, he/she will be better pre-pared to make smarter decisions regarding the direction of his/her firm.

Educational resources can be found through professional trade associations that are geared toward his/her industry, local chamber of commerce as well as the Small Business Administration.

(vi) Emotional Resources: Starting a business can be an extremely stressful endeavour for an entrepreneur to undertake. To maintain the sanity as well as stay motivated, it is important to have a support team that can give inspirations and guidance as needed. This team may be composed of friends and family as well as a mentor orpro-fessional group.

(vii) Moral Resources: Moral Resources include solidarity support, le-gitimacy and sympathetic support. These resources can be easily retracted, making them less accessible than other resources.

(viii) Cultural Knowledge Resource : Cultural Knowledge resource has become widely necessary and universal. Known Examples include how to accomplish specific tasks like enacting a protest event, hold-ing a news conference, running a meeting, forming an organization, initiating a festival, or surfing the web.

(ix) Relational Resource: It consists of such elements as customer relationships, supplier relationships, trademarks and trade names, which have value only by virtue of customer relationships, licenses, and franchises. In fact relational resource is separate from human and structural resource and therefore, it indicates its immense im-portance to an organization's worth.

The value of the relationships a business maintains with its customers and suppliers is also referred as goodwill, but often poorly booked in corporate accounts, because of accounting rules.

HIPOs, as they are called, high potential employees are the ones who have exceptional potential, ability and aspiration for successive leadership positions.

2.Explain the basic requirement for a Contract ? Explain the General Principles for Entering into Contracts with examples?

Ans: Entering into a legal contract with another individual or party helps provide legal protection, as well as a specific outline of the deal. When you enter into a contract with another party, it should meet a few requirements before it can be considered a valid legal contract.

(i) Specific Details: In order for a contract to be valid it has to feature the specific contract details. In the contract, outline exactly what is being dealt with. If you are buying material from a dealer, it has to have the legal description of the material, so that there is no question about which material is being conveyed.

The contract should also be specific about the names of the parties involved and their role in the transaction. It should also outline the nature of the agreement.

(ii) Consideration : A valid legal contract also must have consideration. Consideration is giving something of value in return for something else. In this section, the factors associated with consideration should also be included. For example, you should include information about payment terms, time considerations and other expectations.

(iii) Capacity to Contract: Before a valid legal contract is created, both parties must be able to prove that they have the capacity required. This means that the individuals have to be of legal age, depending on state law and they must be of sound mind.

This means that if they are mentally handicapped or are under the influence of drugs or alcohol, they cannot enter into a binding contract. The parties must also enter into the agreement under their own free will and cannot be coerced into signing.

(iv) Legal: The agreement also has to have legal terms. If you enter into an agreement to perform an illegal act, this would not constitute a legal contract. For example, if you enter into an agreement to launder money for an illegal operation, that contract would not be enforceable by the law because you are involved in an illegal activity.

(v) Proper Form: A legal contract also must be in the proper form. Typically, this means that the contract must be in writing. The proper form is determined by the type of contract that you are engaged in and the laws of your state. In some cases, verbal contracts are binding and are perfectly acceptable. In most cases, you should do the contract in writing so that no confusion exists if any legal matters come up later. General Principles for Entering into Contracts A contract is created the moment two people agree to do something for each other. These people, who are called "contracting parties", can be individuals, bankers, customers, dealers, financial institutions, a group of people or representatives of a business.

In general, it is not necessary to sign a document for a contract to be created. A simple verbal agreement can be enough. However, some kinds of contracts must be in writing, and some must even meet other requirements to be valid.

For Example

1. Many contracts between merchants and consumers must be in writing.

2. A mortgage contract for property must be in writing and made by a notary. Of course, even when the law does not require a written document, it is often a good idea to put a contract in writing. When there is a written document and a problem arises, the disagreement does not become a case of "his/her word against mine".

3. Explain the areas that deserve careful attention during entering into a contract?

Ans: There are some areas that deserve careful attention during entering into a contract includes

(i) The terms of a contract must be precise and definite and there must be no room for ambiguity or misconstruction thereon should exist.

(ii) No contract involving an uncertain or, indefinite liability or any conditions of an unusual character should be entered into without the previous consent of both parties.

(iii) Subject to adequate prior scrutiny of terms, general or special, if any, standard forms of contracts should be adopted, wherever possible.

(iv) In cases where standard forms of contracts are not used, legal and financial advice should be taken in drafting the contracts and before they are finally entered into.

(v) Before entering into a contract or an agreement, all pros and cons should be considered and validity of contractual documents should be ensured.

(vi) If you are sued because you did not respect your contract, you can avoid responsibility if you can prove there was an "Act of God" (event beyond human control), unless the contract states that you are responsible even if an act of God occurs.

(vii) To be considered an Act of God, the event must be outside your control. It must have been absolutely impossible for you to predict the event and prevent its negative impact. Finally, you must have been completely prevented from respecting the contract and from having someone else carry out your duties under the contract for you.

(viii) Generally a contract cannot be cancelled. However, it is possible to cancel a contract in some situations such as when the people involved did not have the right to enter into a contract.

(ix) If your contract is cancelled, it is as though it never existed. The people involved must therefore return to the situation they were in before the contract was entered into. To do this, they must give back to the other person everything they received because of the contract.

(x) While you may have the opportunity to negotiate before you agree, it is common for you to be offered the same or a similar contract as everyone else. This is known as a standard form contract. There are laws to protect you from unfair contract terms in standard form consumer contracts where you have little or no opportunity to negotiate with the trader.

Guwahati University B.com 3rd Semester Entrepreneurship Complete Notes | thetreasurenotes.in

4. Explain the problems faced by start-ups?

Ans: (i) Developing the Vision and Business Idea: Developing a business idea is usually the first challenge faced by every entrepreneur when starting a business from scratch. Finding the right business opportunity or creatively developing an idea is certainly not an easy task. "Envisioning the idea" is the first true task of an entrepreneur. As an entrepreneur, you must possess the ability to see what others cannot see. While others see problems, you must see opportunities.

(ii) Raising Capital for your Startup: After developing your idea, the next challenge you are going to face when starting a business from scratch is that of raising capital. As an entrepreneur, you are the only one that knows business your idea to the core. You are the only one that knows the story of your future.

Trying to convince investors about something that does not exist is definitely a challenge. Trying to make them understand that you are trustworthy and equal to the task is not child's play especially when you are building your first business.

(iii) Business Model Failure : One of the most common causes of failure in the startup world is that entrepreneurs are too optimistic about how easy it will be to acquire customers. They assume that because they will build an interesting web site, product, or service, that customers will beat a path to their door. That may happen with the first few customers, but after that, it rapidly becomes an expensive task to attract and win customers, and in many cases the cost of acquiring the customer is actually higher than the lifetime value of that customer.

(iv) Poor Management Team: An incredibly common problem that causes startups to fail is a weak management team. Weak management teams make mistakes in multiple areas such as strategy; building a product that no-one wants to buy bad marketing strategies etc. They are also usually poor at execution, which leads to issues with the product not getting built correctly or on time, and the go-to market execution will be poorly implemented.

(v) Liquidity or Cash Crunch: A fourth major reason that startups fail is because they ran out of cash. A key job of the CEO is to understand how much cash is left and whether that will carry the company to a milestone that can lead to a successful financing, or to cash flow positive.

(vi) Product Problems: Another reason that companies fail is, because they fail to develop a product that meets the market need. This can either be due to simple execution. Or it can be a far more strategic problem, which is a failure to achieve Product/Market fit. Most of the time the first product that a startup brings to market does not meet the market need.

(vii) Finding Good Employees : Business owners know how difficult it is to find a hardworking, trustworthy employee. Most Finding good employees is a minor task compared to the business challenge of forging your hired employees into a team.

employees want to work less and get paid more. Finding a good employee who will be passionate about delivering his or her services is quite difficult."The competition to hire the best will increase in the years ahead. Companies that give extra flexibility to their employees will have the edge in this area." -Bill Gates

(viii) Finding Good Customers: The next challenge you will face in the process of starting a small business from scratch is finding good customers. In the process of building a business, you will come to find out that there are good customers as well as bad customers. You must be on guard for bad customers. Good customers are really hard to find.A good customer will be loyal to your company and will be willing to forgive you if you make a mistake and apologize. A good customer will try to do the right thing that will benefit both himself and your company mutually. Bad customers will always look for loopholes in the company's policy to exploit and make a few gains.

Bad customers will always try to exploit the company's goodwill and look for ways to rip off the company. Bad customers are responsible for bad debts. Good customers build your business and bad customers will always try to liquidate your business.

(ix) Dealing with Competition: Competition is yet another challenge you will face when starting a business. Most individuals see competition as a plague but competition is a good challenge. It is a benchmark for creativity, the main engine that stimulates innovation and production of quality products at great prices. Without competition, there will be no innovation and without innovation, the world will be stagnant. Competition keeps us on our toes and drives us to constantly improve our products and services. But you must be warned. Competition can make your business lose its relevance in the eye of your customers so you must always be on guard.

(x) Unforeseen Business Challenges and Expenses: Just as a sailor prepares for unexpected storm, just as a pilot is always on the watch for unpredictable bad weather and thunderstorms, so must an entrepreneur prepared for whatever comes.

UNIT WISE NOTES

1. Introduction to Entrepreneurship

2. Entrepreneurship and Micro, Small and Medium Enterprises

3. Public or Private Systems or Stimulation

4. Source of Business Idea and Test of Feasibility

5. Mobilising Resources

5. Explain the Methods to Solve Startup Problems?

Ans: Creating a startup, or managing any business, is all about problem solving. Some people are good at it and some are not. People who are good at problem solving are some of the most valuable and respected people in every area. In fact, success if often defined as "the ability to solve problems."

In many cultures, this is called "street smarts," and it is valued even more than "book smarts." The best entrepreneurs have both. Entrepreneurs who are great problem solvers within any business are the best prepared to solve their customers' needs effectively as well. Following are some simple ways to solve or minimize a startupproblem_

(i) Define the Problem Clearly: Many executives like to jump into solution mode immediately, even before they understand the issue. In some cases, a small problem can become a big one with inappropriate actions. In all cases, real clarity will expedite the path ahead.

(iii) Identify the Cause of the Problem: Find the root cause of the problem, rather than treating a symptom because if the root cause is not understood, the problem will likely recur, perhaps with different symptoms.

(iv) Identify Multiple Possible Solutions: The more possible solutions you develop, the more likely you will come up with the right. one. The quality of the solution seems to be in direct proportion to the quantity of solutions considered in problem solving.

The preliminary contract formalizes the promise to sell and purchase the immovable by the parties in a transaction. By signing it, the vendor and the purchaser are legally committed. You must thereafter purchase the apartment for the agreed price. And except for exceptions in Law or in the contract, it is difficult if not impossible to walk away from a preliminary contract without financial and legal consequences.

The builder or developer has the obligation to deliver the immovable in the delays and in accordance with the specifications agreed to in the preliminary contract, and to transfer the title of the property, problem, rather than treating a symptom because if the root cause is not understood, the problem will likely recur, perhaps with different symptoms.

(v) Make a Prompt Decision: Select a solution, any solution, and then decide on a course of action. The longer you put off deciding on what to do, the higher the cost, and the larger the impact will be. Many start-ups take too long to decide & that becomes a reason for the failure.

(vii) Cut Costs In-House: Entrepreneurs should run the business as lean an operation as possible, in every process from manufacturing to administrative functions efforts should be made to cut costs wisely. The start-ups should involve employees in this endeavour as well so that they cut costs happily and understand the entrepreneur's perspective.

(viii) Overcome Your Fears of Risk-Taking by confronting them Head-on: Being an entrepreneur is risky business. Every decision you make could potentially hurt or help your company. Believe in trusting your instincts, educating yourself about the pros and cons of your decisions, and getting a second opinion from another entrepreneur in whom you confide.

(ix) Formulation of Strong Business Strategies : Without strategy, change is merely substitution, not evolution. A solid strategy must be implemented in order to solve any problem. Many startups attempt to dissect a problem rather than identify the strategy for change that lies within the problem itself.

Effective startups always know how to gather the right people, resources, budget and knowledge from past experiences. They inspire people to lift their game by making the problem solving process highly collaborative; for them, it is an opportunity to bring people closer together.

6. Explain preliminary Contract? Explain what needed to be included in a preliminary Contract?

Ans: The sale of a residential immovable to a physical person by a builder or developer, must necessarily (it is required by Law) be preceded by a preliminary contract.

The preliminary contract should also include the following_

1. The names and addresses of the purchaser and the vendor, 2. The description of the apartment (its address and cadastral designation);3. The identification (if needed) of the private parking and storage portions, and their cadastral description; 4. The purchase price offered and, if applicable, the terms of payments. 5. The superficial area of the private portions;6. The identification and the ID number (if applicable) of the parking and storage space(s) allocated as (a)common portion(s) for restricted use;7. The agreed price and, if applicable, the terms of payment,8. The amount(s) of any deposit(s); 9. Your intent or not to obtain a hypothecary loan to finance the purchase, along with the particulars of such financing, 10. Any movable property or items included in the purchase price(for example: appliances, curtains and light fixtures); 11. The rented devices or apparatus;12. Any conditions suspending the contract; 13. The date of taking possession of the unit;14. The date scheduled for the signing of the deed of sale;15. The name of the notary before which the deed of sale is to be signed;16. The term of enforceability of the preliminary contract, meaning the date and the precise hour after which it will become null and void; 17. The signature of both parties.

6.Explain the key terms to know for vendor contracts?

Ans: One way to prepare for and better engage in such negotiations is to develop a contract negotiation playbook. While each set of tactics and strategies will necessarily reflect the internal business rules of the individual company, the five areas discussed here should form a part of any playbook. Once developed, the management team can empower mid-level management to stream-line decision making.

1. Proprietary & confidential info: It is extremely important to consider proprietary and confidential information before the start of a relationship. Determining ownership scope of foundational materials, resulting work product, and the attendant rights, as well as obligations to safeguard that information and those rights, will have a material impact on costs and pricing Companies commit significant resources to developing proprietary information and attempting to protect its confidentiality. Due to the large number of middleware (platforms, Oses, software developers, ad networks, cellular carriers), mobile, social, cloud and big data applications and services are gathering, storing, distributing and modifying a rapidly increasing amount of digital proprietary information and assets. Sadly, unauthorized access, disclosure, misuse and conversion of confidential and proprietary information is an unfortunate reality for many firms. A company should create and maintain an IP Checklist (example here) that creates a roadmap for addressing risks and obligations. The trend toward added cybersecurity discussions should also be addressed here. The simple act of asking "Why," such as "Why does that person/application need access to that data?" can go a long way in strategically thinking about how to address weak links in data sovereignty.

3. Changes in scope and deliverables: It is inevitable that a need to change or modify the scope of services performed or the nature of the deliverables provided. This section should be considered carefully to provide a clear set of exceptions and a mechanism for addressing certain changes that are likely to be expected given the nature of the services performed or software licensed. A good place to start is agreeing on a detailed budget with items, costs, deadlines. Address elements within the scope that require licensure or additional regulatory compliance verification. Built-in approval process and authority will streamline ministerial changes.

4. Termination and remedies: Every time I look at an agreement for services such as software development, data licensing, or even mergers and acquisitions, the first question I ask is can we get out of this contract if we have to? If so, how, and under what circumstances. For example, unilateral immediate termination for breach of material obligation sounds great, unless you've already pre-paid for two (2) years of services. Termination rights should be crafted with the idea of honoring the value in the original bargain. This is not to say, however, that egregious conduct should not be punished. Because contract law rights and remedies vary by state, it is important to understand the limitations in any of the states in which you operate. Shockingly, there are 47 different state data breach notification laws and, in some cases, federal requirements as well. Most states recognize many types of "monetary" damages including consequential, incidental, special, punitive, exemplary, indirect, and lost profits. However, states may differ on when consequential damages can be recovered (they were foreseeable) versus what kinds of damages are consequential.

5. Disclaimers and indemnifications: One of the most important functions of a contract is to reduce uncertainties and mitigate risks. That is why almost all contracts contain "Disclaimers" that limit liability. Although they may seem like densely-worded, "boilerplate" provisions, and often overlooked, these provisions broadly affect a party's ability to bring a claim, show liability, and prove damages that can be recovered. It is important to note that enforcement of limitation of liability provisions vary from state to state. The general rule in contract law is that in the commercial context, many states have found these clauses to be a mere shifting of the risk and enforce them as written.

In general, Disclaimers are good where scope and amount of liability are uncertain, but Not as good in construction related contracts. Scope verification. Built-in approval process and authority will streamline ministerial changes.

6. Termination and remedies: Every time I look at an agreement for services such as software development, data licensing, or even mergers and acquisitions, the first question I ask is can we get out of this contract if we have to? If so, how, and under what circumstances. For example, unilateral immediate termination for breach of material obligation sounds great, unless you've already pre-paid for two (2) years of services. Termination rights should be crafted with the idea of honoring the value in the original bargain. This is not to say, however, that egregious conduct should not be punished. Because contract law rights and remedies vary by state, it is important to understand the limitations in any of the states in which you operate. Shockingly, there are 47 different state data breach notification laws and, in some cases, federal requirements as well. Most states recognize many types of "monetary" damages including consequential, incidental, special, punitive, exemplary, indirect, and lost profits. However, states may differ on when consequential damages can be recovered (they were foreseeable) versus what kinds of damages are consequential.

In addition, you should consider the need for non-monetary "equitable" relief that may come in the form of court restructuring of an agreement, or injunctive obligations. Although injunctive relief has become the principal remedy for breach of obligations of confidentiality and non-disclosure, enforcement has been primarily confined to preventing the continued misuse of confidential information and not recovery ofaterials copied from confidential and proprietary information.

7. Disclaimers and indemnifications: One of the most importantfunctions of a contract is to reduce uncertainties and mitigate risks.That is why almost all contracts contain "Disclaimers" that limit liability.Although they may seem like densely-worded, "boilerplate" provisions,and often overlooked, these provisions broadly affect a party's ability tobring a claim, show liability, and prove damages that can be recovered. It is important to note that enforcement of limitation of liability provisions vary from state to state. The general rule in contract law is that in the commercial context, many states have found these clauses to be a mere shifting of the risk and enforce them as written. In general, Disclaimers are good where scope and amount of liability are uncertain, but Not as good in construction related contracts. Scope is often affected by relative bargaining power. Since the terms "indemnify," "hold harmless," and "defend" have distinct and separate meanings, consider using collective definitions.

If found to be enforceable, a limitation of liability clause can "cap" the amount of potential damages to which a party is exposed. The limit may apply to all claims arising during the course of the contract, or it may apply only to certain types of claims. Limitation of liability clauses typically limit the liability to one of the following amounts: (1) the compensation and fees paid under the contract; (ii) an sum of money agreed in advance; (iii) available insurance coverage; or (iv) a combination of the above.

Caps: Parties can and typically do agree in their contract that liability is capped at some dollar amount. If liability exists and if damages can be proved, then the aggrieved party recovers those damages, but only up to the agreed cap. Sometimes these are mutual; other times they are one-sided. Sometimes the cap is a fixed sum (e.g., "the amounts paid for the services"). Other times, the parties may choose to tie the cap to the type of harm, (e.g. personal injury, property damage, violations of confidentiality obligations).

In more sophisticated contracts, "baskets" protect a party by providing a dollar threshold that aggregate losses must meet before it is liable to the other. Baskets can be tipping baskets, meaning that once the basket is "full," the obligated party must indemnify the other from the first dollar of the its losses, or deductible baskets, meaning that the indemnification covers only claims above the threshold amount.

7. Explain the Stages of contract management?

Ans: Contracts play a significant role in the end-of-quarter crunch, and are broken up into stages to organize efforts and structure the typical contract process. When done manually, creating a contract can prove quite time-consuming. The process includes several of the following steps :

1. Initial requests: The contract management process begins by identifying contracts and pertinent documents to support the contract's purpose.

2. Authoring contracts: Writing a contract by hand is a time consuming activity, but through the use of automated contract management systems, the process can become quite streamlined.

3. Negotiating the contract: Upon completion of drafting the contract, employees should be able to compare versions of the contract and note any discrepancies to reduce negotiation time.

4. Approving the contract: The instance in which most bottlenecks occur is getting manage ment approval. Users can pre emptively combat this by creating tailored approval workflows, including parallel and serial approvals to keep decisions moving at a rapid pace.

5. Execution of the contract: Executing the contract allows users to control and shorten the signature process through the use of electronic signature and fax support.

6. Obligation management: This requires a great deal of project management to ensure deliverables are being met by key stakeholders and the value of the contract isn't deteriorating throughout its early phases of growth.

7. Revisions and amendments: Gathering all documents pertinent to the contract's initial drafting is a difficult task. When overlooked items are found, systems must be in place to amend the original contract.

8. Auditing and reporting Contract management does not simply entail drafting a contract and then pushing it into the filing cabinet without another thought. Contract audits are important in determining both organizations' compliance with the terms of the agreement and any possible problems that might arise.

9. Renewal : Using manual contract management methods can often result in missed renewal opportunities and business revenue lost.Automating the process allows an organization to identify renewalopportunities and create new contracts.

8. What does Contract Management Process Include? Explain the Key Points and Activitiesof Contract Management?

Ans: The aim is to meet the operational, functional and business objectives required by the contract and provide a profitable interaction. The contract management process includes

1. Managing Service Delivery: To ensure that the products are delivered as and when they are ordered.

2. Managing the Relationship: This is the communications between the vendor and the purchaser.

3. Managing the Contract: This is the ongoing contract administration to ensure that the day-to-day procurement activities follow the spirit and sections of the contract.

4. Seeking Improvements: Improvements within a procurement environment mean greater efficiencies and an increase in profits.

5. Ongoing Assessment: The entire procurement activities are assessed on a continual basis to ensure that the contracts are adhered to and the purchasing processes followed.

6. Managing Change: In a long term procurement relationship,there are sometimes changes in activities, requirements or products available All of these changes need to be noted and handled effectively. Procurement contractural relationships are fundamental to the the ability of a company to deliver their services and/or provide products to their customers. If deliveries are late the company may be unable to service their customers.

A thorough understanding of the contract management process and all that it entails are crucial to the success of a company. The key activities within a contract management process are :

1. The purchasing company should possess a purchasing strategy that focuses on value for money and efficient procurement activities. All staff and vendors should be aware of these strategies and the resulting activities are required to follow them.

2. Key Performance Indicators (KPI's) should be in place with all vendors. These should be used to measure vendors's performance as well as encourage them to reach for excellence. There should be a detailed master agreement in place with each vendor that details the expected performance and quality service that is to be delivered on a regular basis. This is a core requirement of any contract management process.

3. Ongoing and regular monitoring of each vendor should be instigated and maintained. This can be undertaken by the installed software wherever possible. At the very least, delivery, prices, quality and exception handling should be monitored.

4. Regular ad hoc tests as to service, product quality and communication should be undertaken and the actions taken on the results. 5. Continual improvements of vendor/purchaser relationships should be undertaken.

6. All potential risks should be identified and managed.

7. All issues, exceptions and problems should be managed and escalated to the appropriate management level. They should all be resolved within an appropriate time frame.

8. In the event of poor vendor performance, the appropriate remedies should be put into place in a timely manner. These might include financial penalties, training or removal of the supplier relationship.

-0000-

UNIT WISE NOTES

1. Introduction to Entrepreneurship

2. Entrepreneurship and Micro, Small and Medium Enterprises

3. Public or Private Systems or Stimulation

4. Source of Business Idea and Test of Feasibility

5. Mobilising Resources

The Treasure Notes

Entrepreneurship Unit -5, Notes B.Com 3rd Sem (Hons) Guwahati University

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