Text 4. Read this article and give Russian equivalents to the underlined expressions.

TYPES OF BUSINESS OWNERSHIP

Sole Proprietorship. The most common form of ownership is a sole proprietorship —that is, a business owned by one individual. Today there are more than 16 million sole proprietorships in the United States. These businesses have the advantage of being easy to both set up and dissolve because few laws exist to regulate them. Proprietors, as owners, also maintain direct control of their businesses and own all their profits. On the other hand, owners of proprietorships are personally responsible for all business debts and, constrained by the limits of their personal financial resources, they may find it difficult to expand or increase their profits. For those reasons, sole proprietorships tend to be small, primarily service and retail businesses.

Partnership. A partnership is an association of two or more people who operate a business as co-owners. There are different types of partners. A general partner is active in the operation of a business and is liable for all of its debts. In small businesses with only two or three owners, all will be general partners. A limited partner, by contrast, invests in a business but is not involved in its daily operations. Partnerships, like sole proprietorships, are relatively easy to establish. Furthermore, partners can pool financial resources to fundexpansion, and can divide their duties and responsibilities according to personal expertise and abilities. For example, one partner may be very good at selling, while another has a knack for maintaining good financial records. As with sole proprietorships, however, partnerships may entail substantial financial risks, as all of the general partners are liable for the debts of the business. And unlike proprietorships, disagreements among partners can harm partnership businesses.

Corporation. A corporation is a legal entity that exists as distinct from the individuals who control and invest in it. As a result, a corporation can continue indefinitely through complete changes of ownership, leadership, and staffing. Current owners can sell theirholdings to other individuals or, if they die, have their assets transferred to heirs. This is possible because a corporation creates shares of stock that are sold to investors. One strength of the corporate business structure is that the stockholders have limited liability, as opposed to the unlimited liability of general partners, so they cannot lose more than their initial investment. Investors may also easily buy and sell stocks of public corporations

through stock exchanges. By offering stock publicly, a corporation enables anyone with some money to buy the stock and become a part-owner of the company. As a result, corporations can more easily raise capital for business expansion than can sole proprietorships and most partnerships. Investors control a corporation through the election of a managing body, known as a board of directors. In a large corporation, investors collectively decide who will oversee the operation of the enterprise. In turn, the board chooses a president, who decides on the key company personnel and helps formulate company strategy. Many corporations are highly successful business organisations, withprofits far exceeding those of many sole proprietorships and partnerships. However, they traditionally have higher tax burdens than other kinds of businesses.

Joint Venture. In joint ventures and syndicates, individuals or businesses cooperate to create a single product or service package. A joint venture is a partnership agreement in which two or more individual or group-run businesses join together to carry out a single business project. For example, U.S.-based General Motors Corporation and Toyota Motor Corporation of Japan have a joint venture called New United Motor Manufacturing, Inc., created for the purpose of producing cars in California.

 

 

Task 1. Answer the following questions:

1. What type of ownership is most commonly found in the USA?

2. How does a ―limited partner‖ differ from a ―general partner?‖

3. If you wanted to buy stocks in a company, in which form(s) of ownership would you be interested?

4. What  are  businesses  that  are  run  by  two  different  countries  working  together usually called?

5. What is the function of the ―board of directors‖ of a corporation?

 

 

Task 2. Match the following expressions with the correct definitions:

1. Stockholder

2. General Partner (GP)

3. Corporation

4. Limited liability

5. Joint venture (JV)

6. Limited Partner (LP)

7. Sole proprietorship

8. Partnership

a) an investor in a limited partnership who has no voice in the management of the partnership

b) a person who joins with at least one other to own and operate a business for profit - and who (unlike a corporation’s owners) is personally liable for all the business's debts and obligations. His actions can legally bind the entire business.

c) type of business entity in which partners share with each other the profits or losses of the business undertaking in which all have invested in. This type of business is often favoured over corporations for taxation purposes, as its structure eliminates the tax levied upon profits realised by the owners of a corporation.

d) a type of business entity which legally has no separate existence from its owner. All debts of the business are debts of the owner. This type of business does not pay

corporate taxes, but rather the person who organised the business pays personal income taxes on the profits made.

e) the legal duty to pay back debts only up to the limit of the money owned by a company.

f) an individual or company that legally owns one or more shares of stock in a joint stock company. Companies listed at the stock market strive to enhance shareholder value.

g) a legal entity which, while being owned collectively by a number of individuals or other legal entities, can exist completely separately from them. Typically, a board of directors governs this type of business on the behalf of its members.

h) a business activity begun by two or more companies acting together, sharing the costs, risks, and profits. It can be formed for one specific project only, or a continuing business relationship.

 

Task 3. Translate the following sentences into English:

1. Индивидуальный предприниматель вкладывает в дело свой личный капитал. Для начала дела ему нужно иметь достаточные средства и знать местные законы.

2. Индивидуальное предпринимательство - это самая простая и дешевая форма бизнеса. Подобный бизнес проще всего организовать, в руках одного человека сосредоточены все полномочия и он несет юридическую ответственность за долги фирмы.

3. Однако у такой формы ведения бизнеса есть и недостатки: неограниченная личная ответственность индивидуального предпринимателя за долги, ответственность перед законом и ограниченность ресурсов.

4. Индивидуальное предпринимательство можно назвать нестабильным бизнесом, так как болезнь или смерть предпринимателя ставят данный бизнес под угрозу.

5. Для создания товарищества необходимо составить письменное соглашение (устав), где будут оговорены все положения об управлении товариществом.

6. Для товарищества предусмотрена неограниченная ответственность по крайней мере одного из партнеров. Рабочая нагрузка, идеи, опыт и ответственность делятся между партнерами.

7. Товарищество, также как и индивидуальное предпринимательство, достаточно просто организовать, и его участники владеют дополнительными источниками капитала.

8. Участники товарищества не платят корпоративного налога на прибыль. Они включают свои доходы от деятельности товарищества в свой личный доход, который облагается обычным подоходным налогом с физических лиц.

9. В акционерных обществах закрытого типа (АОЗТ) лишь немногие люди владеют акциями и торгуют ими, а в акционерных обществах открытого типа (АООТ) акции через брокеров продают любому человеку, желающему их купить.

10. В случае ликвидации акционерного общества ответственность членов компании ограничивается лишь внесенным ими капиталом.

11. Цены на акции растут или падают в зависимости от того, настолько хорошо работает фирма. Например, когда фармацевтическая компания изобретает какое-то новое лекарство, то цены на ее акции подскакивают даже до того момента, как товар попадает на прилавок.

12. Совет директоров собирается несколько раз в год и осуществляет общее руководство АО. Члены совета директоров избираются акционерами. Повседневные решения принимаются руководителями высшего и среднего звена.

13. Держатели акций имеют право посещать собрания акционеров и принимать решения по основным вопросам, таким, например, как замена членов совета директоров, а иногда и генерального (исполнительного) директора.

14. Совместное предприятие – это не компания с иностранными инвестициями, а объединение двух или более юридических или физических лиц с целью выполнения какого-либо совместного проекта.