Vocabulary tasks

A Find in the text the English equivalents for the following Russian words and expressions.

1 небольшое предприятие 2 бремя ответственности 3 владелец 4 предприятие на дому 5 подоходный налог на прибыль 6 прибыли 7 управлять компанией

Sole proprietorship

In this form, the owner is the business. Sole proprietorships are very common and constitute over two- thirds of all American businesses. They are also usually small enterprises. Sole proprietors can own and manage any type of business from home-office undertaking to a huge restaurant or construction firm. A major advantage of sole proprietorship is that the proprietor receives all the profits (because he/she takes all the risks). It is easier and less costly to start sole proprietorship. The sole proprietor is free to make any decision. He/she also pays only personal income taxes on profit. But the major disadvantage of the sole proprietorship is that the proprietor alone, as sole owner, bears the burden of any losses or liabilities, i.e. is liable for his debts.

B Use an appropriate word or phrase from the box to complete each sentence.

income general partner limited liability management joint undertaking carry on business statute shared agreement

Partnerships

General partnership

A partnership is a 1)________ that is created by 2)________, written or not, between two or more persons to 3)________ for profit. Partners are co-owners of a business and have a joint control over its operation and the right to share in its profits. They take part in the 4)________ of the business. Partner’s profit is taxed as individual 5)________.

Limited partnership

A special and popular form of partnership, which consists of at least one

6)________ and one or more limited partners. General partners have all rights in management, limited partner has no right in management. Profits are 7)________ according to the agreement. The advantage of becoming a limited partner is 8)________, when the maximum money at risk is defined by the limited partnership agreement. Unlike the general partnership, the limited partnership is created by 9)________ .

C Write down English equivalents for Russian words and expressions.

Corporations consist of (акционеров). А (Совет директоров), elected by the shareholders, manages the business. The board of directors normally employs (чиновников) to overse the day-to-day operation. One of the key features of a corporation is that the (ответственность владельцев) is limited to their (инвестициями). The corporation is created by statue and becomes a (юридическое лицо). The major disadvantage of a corporations is “double taxation” – corporations pay income tax on (чистая прибыль) and shareholders pay income tax on their (дивиденды).

D Complete the following dialogue.

A Well, I’ve read about the types of businesses enough. What a knotty problem! The more I read the more confused I get.

B. Come on, don’t get nervous. I’m ready to help you. Go ahead with questions.

A O’K. The sole proprietorship… It may be a big restaurant or construction firm. That means people work there, right? But why then the owner receives all the profits?

B. …………………

A. I see. What about liabilities? Can you explain this in plain words?

B. …………………

A. Aha, I got that. Now let’s discuss the partnerships. How many partners can be there in each type of this business?

B. …………………

A. Do they equally share the profits?

A. …………………

B. How do the partners pay the taxes?

A. …………………

B. This is a great advantage, I should say. If I ever decided to start a business I would make it a partnership. What is better - to be a general or limited partner?

A. …………………

B. Now we are coming to corporations... But I have no questions here. No, this double taxation. Will you fill me in?

A. …………………

B. Thanks a million. Now I understand everything.

E Complete the sentences using the following phrases: meet state requirements, to file the form, by agreement, statutory authorization, to complete the form, to receive a state charter

1 General partnerships are formed…………………

2 Limited partnerships must…………………

3 Corporations are created by…………………

4 Corporations must…………………

F Match the words with their definitions.

1 insolvency 2 termination 3 withdrawal 4 perpetual existance 5 cessation 6 incapacity

a continuation all the time without stopping b state of not having enough money to pay what you owe c an end, ending d disability to do smth e stop taking part in an activity or being a member of organization f end of doing smth

Over to you

1 What are the three basic types of business organizations?

2 John wants to control a business completely, knows nobody else with whom he wishes to work, and dislikes formalities, paperwork and lawyers. What type of business organization would he probably prefer?

3 Mary has the time and expertise to put into a new bakery, but little money. Sally has a substantial sum of money, but no interest in day-to-day operations. What business form would you recommend?