Ex. 4. Put 8-10 questions on the text so that they cover its content. Text 4. Choice of ownership form

1. Each of the three kinds of ownership – sole proprietorship, general partnership, and corporation – has important advantages and disadvantages, and no form is ideal for all businesses. The special characteristics of each form, however, usually make one more suitable than another for a given business enterprise. Fortunately, the form of ownership can usually be changed as needs change. The major factors to be considered in choosing a form of ownership are the nature of the business¹, the financial effects on operation, and the attitude of the owners.

2. ______ The size of the business and the kind of goods and services it provides will influence the best form of ownership. The features of proprietorship are generally most beneficial² to a small business, while one of the main advantages of a corporation is that it can provide the resources and management needed for a large company. The scope of operations³ has a similar effect: proprietorships are more common in businesses with local markets, while corporations are more common for regional or nationwide operations. If the corporation form of ownership is chosen, the business will always be subject to more government regulation than proprietorships or partnerships.

3. ______ The amount of funds⁴ needed by a business is one of the single most important factors in choosing a form of ownership. A proprietorship is limited to the resources of the owner, and partnerships are limited to the resources of its partners. Corporations, however, can assemble⁵ large amounts of capital from many different investors. The degree of risk and the extent of liability the owners are willing to accept will affect the choice of the form of ownership. A corporation usually has fewer tax advantages⁶, and this must be weighed against other needs. The division of profits is usually quite simple in a corporation since earnings are distributed based on the number of shares owned. Some partnerships require complex earnings distribution schemes to allow for the varying contributions and portions of ownership held by partners.

4. ______ The number of owners involved in a business venture⁷ has an obvious effect on the form of ownership. Often, an entrepreneur may wish to have complete control of operations and is unwilling to share profits; proprietorship is the clear choice if needs for capital and management can still be met. Where there are multiple⁸ owners; other factors must be considered. If a continuing operation is to be established, one that will outlast⁹ its founders¹⁰, a corporation is most suitable. If the owners wish to retain a high degree of direct control of operations, a partnership will more often offer this than would a corporation. A partnership also generally gives owners more equal participation in management; corporate organisation typically limits the authority of individuals to specific areas.

Notes: 1) природа бизнеса; 2) выгодный; 3) масштаб действий; 4) капитал; 5) собирать; 6) налоговые льготы; 7) коммерческое предприятие; 8) многочисленный; 9) пережить; 10) основатели.

COMPREHENSION CHECK

Ex. 1. Read the text. Provide paragraphs 2-4 with an appropriate heading (choose among the proposed variants below):

1. Financial effects.

2. Attitude of the owners.

3. Nature of the business.

Ex. 2. Translate paragraph 4 in writing.

Ex. 3. Read the text again and choose the correct alternative for each of the following questions:

1. Which factor affects the choice of ownership form?

1. Type of business.

2. Funds.

3. The wish of the entrepreneur.

4. All of them.

2. Which form of ownership is more suitable for operating in local markets?

1. Sole proprietorship.

2. General partnership.

3. Corporation.

4. All except corporation.

3. Which form of ownership should be chosen to avoid strong government regulation?

1. Sole proprietorship.

2. General partnership.

3. Corporation.

4. All except corporation.

4. In which form of ownership is the division of profits most difficult?

1. Sole proprietorship.

2. General partnership.

3. Corporation.

4. All except corporation.

5. Which form of ownership would give you an absolute control of business?

1. Sole proprietorship.

2. General partnership.

3. Corporation.

4. All except corporation.