Read the text paying attention to the words in bold and do the tasks after it.

What sort of company is it? [36]

A company (UK) or corporation (US) is a form of business organization operating to make a profit. There are three principal forms of business organization: the sole proprietorship, the partnership, the corporation.

The simplest form of business organization is the sole proprietorship, which is owned by one person. The owner has relatively unlimited control over the business and keeps all the profit. These firms are usually owned by one person who has day-to-day responsibility for running the business. Sole proprietorship is the most numerous form of business organization.

In a partnership, two or more people share ownership of a single business. Like proprietorship, the law does not distinguish between the business and its owners. The partners should have a legal agreement that sets forth how decisions will be made, profits will be shared, disputes will be resolved, how future partners will be admitted to the partnership, how partners can be bought out, or what steps will be taken to dissolve the partnership when needed.

A corporation is charted by the state in which it has headquarters. It is considered by law to be a unique entity, separate and apart from those who own it. A corporation can be taxed; it can be sued; it can enter into contractual agreements. The owners of corporation are its shareholders. The shareholders elect a board of directors to oversee the major policies and decisions. The corporation has a life of its own and does not dissolve when ownership changes.

Companies are involved in many activities. For example buying, selling, marketing and production, in a range of different industries or business sectors, such as information technology, telecommunications, film, and car manufacture and so on.

Understanding financial performance is an often neglected skill among managers, but it is a vital one. Finance, financial statements analysis and financial reporting provide important insights into business performance, resource allocation and time management.

6. Answer the questions:

1. What are the three principal forms of business organization?

2. What is a sole proprietorship?

3. What are the main positive and negative features of a sole proprietorship?

4. What is a partnership?

5. What should partners have to be able to run their business?

6. What is a corporation?

7. Who are the owners of a corporation?

8. Who oversees the major policies and decisions in a corporation?

 

7. Match the types of business organizations on the left with the definitions on the right [37].

1. charity	a) an organization which is part of the state administration.
2.cooperative	b) a company whose shares are publicly available
3.enterprise	c) a company which owns another
4.government agency	d) a firm where shareholders’ liability is limited
5.holding company	e) a firm based in a tax heaven to avoid higher taxation
6.limited company	f) an organization to relieve poverty, advance religion or education, etc; benefits from some financial concessions.
7.minority interest	g) two or more partners working together for profit, without limited liability
8.multinational	h) a company owned by the state
9.nationalized company	i) a friendly association of people
10.offshore company	j) a firm, usually without commercial activity, created to be parent to other companies
11.parent company	k) a new commercial activity
12.partnership	l) a company whose shares are not publicly available
13.private company	m) firm owned by a parent company
14.public company	n) company in which another firm has less than a 50% of interest
15.society	o) an organization operating in several countries
16.subsidiary (affiliate)	p) a democratic firm owned by its workers.

8. Underline the odd word in each group [38].

type of organization:

limited company

cooperative

donation

Example:

1.	public limited company:	investment	shareholders	donors
2.	money that people put in:	profit	donations	investment
3.	staff:	volunteers	employees	shareholders
4.	limited company:	board of governors	shares	profit
5.	charity:	donors	investors	surplus
6.	trust:	council of trustees	shares	board of governors

10. Match the information about these multinational companies to the correct company logo [39].

Company logo	Company activities	The company says
	1. The third largest record company in the world. It’s also the world’s largest publisher of songs and music.	a“we are committed toproviding high quality food.”
	2. The world’s largest hamburger restaurant company. It has over 19,000 restaurants in 100 countries.	b“(We) lead the world in provision of news and financial information to broadcasters, newspapers, financial markets and on-line services.”
	3. This company provides news and financial data to the business community.	c“We aim to be the world’s premier music company in all aspects of our business.”
	4. This company is an international air-express carrier. It delivers packages and documents all over the world.	d“We keep our promises.”