2.2.3 Read the text again to answer the following questions.

1) What does property law deal with?

2) How is the word property defined?

3) What is a general division of property?

4) What is tangible real property (tangible personal property, intangible personal property, and intellectual property)?

5) In what way can intellectual property be protected?

6) On what terms can a patent be granted?

7) What rights are protected by copyright and trademark?

8) What does the concept of fair dealing mean?

9) How can private property be transferred?

10) Are there any ways to restrict property rights?

2.3. Company law

2.3.1 Study these words before reading the text.

limited company (Ltd) – компания с ограниченной ответственностью

legal person – юридическое лицо

legal identity (entity) – юридическая правосубъектность

limited liability – ограниченная ответственность по долгам

assets – имущество

partnership – партнерство, товарищество

sole proprietor(ship) – частный предприниматель(ство)

capital – капитал

to raise capital – накапливать капитал

loan = overdraft – заем

share = security = equity = stock – акция

shareholder – акционер

majority (controlling) interest – контрольный пакет акций

dividend – дивиденд

a business – предприятие

to run a business – вести дело, управлять компанией

dissolve = wind up = terminate = liquidate – распускать, прекращать существование, ликвидировать

to go bankrupt – обанкротиться

ultra vires – вне компетенции

insider trading – незаконные сделки с ценными бумагами с использованием конфиденциальной информации

2.3.2 Read and translate the text.

Company law is a set of laws designed specifically to regulate business. In common law countries company law is found partly in court cases and partly in statutes. Throughout the world, most businesses face similar problems; they must determine their organizational form; duties to clients, investors and employees; tax liabilities; and abilities to minimize losses if the business fails.

When people wish to associate for business, the first question they have to consider is whether to form a limited company (also called a corporation), a partnership or a sole proprietorship.

A limited company is a kind of legal person with the right to sue and be sued. It has a legal identity separate from its members. The members of a limited company have limited liability. This means that if the business has difficulties, the members have to pay its debts only up to a certain limit. The company’s liability itself is not limited; as long as the business has money or assets creditors may sue. The internal management of the company is regulated by a document called the Articles of Association. The Articles have rules about holding meetings; members’ voting rights; issuing shares; and appointment and removal of directors.

Another way to run a business is for two or more people to form a partnership in which they share management, profits and liability to debts. Unlike members of a company, partners have unlimited personal liability for debts to creditors.

A sole proprietorship is a business owned and usually operated by a single person. Its main characteristic is that the owner and the business are the same. And even if a sole proprietor employs other people, he alone is responsible for management and for any debts. Some examples include small retail stores, doctors’ and lawyers’ practices and restaurants.

The money needed to start a business is called capital. If a person does not have enough capital to start a business, he may borrow some from the bank in the form of a loan or overdraft. Selling shares is another way companies raise capital. A share is ownership of a proportion of a company, and the right to a proportion of any profit it makes (called dividend). If a shareholder has more than 50% shares, he is a majority shareholder and has a majority or controlling interest in the company.

A business may be terminated (dissolved) when its registration is cancelled or it goes bankrupt – that is, it cannot pay all its debts.

Violation or breach of company law may cause both civil suits and criminal prosecutions. For example, it is illegal if a company is engaged in an activity which is outside its capacity. Such activity is called ultra vires and may cause civil suits. The purpose of the doctrine is to stop using company assets for unauthorized activities.

A possible cause for criminal prosecution is insider trading. This means using inside knowledge to gain private profit when buying and selling company shares. Directors and employees of companies often know if a company’s shares will rise or fall long before ordinary shareholders. As a result, they could make profits by buying or selling before everybody else or by selling their special information.