Companies a sole proprietorship a partnership owner

1. About 50 percent of entrepreneurs start their business in industries in which they have some _______.

2. People who come from families whose members were in business themselves are more likely to start their own _______.

3. In a large business the tasks of organizing and operating are done by many hired _______.

4. _______ is a business owned by one person.

4. All debts and all problems associated with the business belong to the _______.

5. _______ is a business organization that is owned by two or more persons.

6. If the business were to fail, its _______ would have the right to recover their money from any, or all, of the partners.

7. Ownership of a corporation is represented by shares of stock, and for that reason corporate owners are known as _______.

IV. Read and translate the text:

There are numerous reasons that make people think about owning a business of their own. Personal independence, unlimited profit potential, the opportunity to work at something that they really love and at hours they choose are some of the reasons people have given for trying entrepreneurship. Many business leaders begin their careers as entrepreneurs after four years of undergraduate college training and even additional graduate school training. Others become successful entre­preneurs without special training.

Many colleges now offer programs that teach students how to start and operate a business. Basic information is combined with hands-on experience and the advice of successful business consultants. These programs help potential entrepreneurs decide whether their own ideas are good and how to follow through with them. With the high rate of business failure, this approach can prevent personal financial losses.

A common way to learn about a business, and the opportunities for starting one similar to it, is to learn while working for someone else. It provides a source of steady income to people while they are planning to start their own businesses. About 50 percent of entrepreneurs start their businesses in industries in which they have some experience.

Evidence shows that people who come from families whose members were in business themselves are more likely to start their own companies. Unfortunately, the record shows that two out of three new businesses fail within their first four years.

Small businesses face many problems. Bad economic times affect small business more than they do big business. In addition, small business profits tend to fall faster, and small businesses are more likely to fail.

What are the problems that face small business now? In January, 1985 the National Federation of Independent Business reported that the four top problems facing small business at that time were taxes, slow sales, the high cost of borrowing money and competition from other businesses.

In a large business the tasks of organizing and operating are done by many hired managers.

A corporation is one kind of business organization. Other kinds of business organizations are sole proprietorships and partnerships. Sole proprietorships are the most numerous kind of business organization, but most are very small. The reason for their popularity is that they are the easiest and least costly to organize.

Sole proprietors own all the profits of their enterprises, and they are their «own bosses», free to make whatever changes they please. They have minimal legal restrictions and do not have to pay the special taxes placed on corporations. Sole proprietors also have opportunity to achieve success and recognition through their individual efforts.

There are also disadvantages. A very serious one is the unlimited liability that each proprietor faces. All debts and all problems associated with the business belong to the owner. A second disadvantage of the sole proprietorship is that it has limited capital. The money that a proprietor can raise is limited by the amount of his or her savings and ability to borrow. Also, when the owner dies, the business dies. Other disadvantages may include lack of opportunities for employees, limitations of size and lack of management resources.

A partnership is a business organization that is owned by two or more persons. Partnerships offer certain advantages over sole proprietorships:

- Partners bring additional funds to a proprietorship.

- Partners can bring fresh ideas and talents to business organizations.

- Like the sole proprietorship, partnerships are relatively easy to form and are not subject to special taxation.

- Partnerships have the following disadvantages:

- In many cases, each of the partners is subject to unlimited liability.

- Partners are individually responsible for all the debts of the business. In other words, if the business were to fail, its creditors would have the right to recover their money from any, or all, of the partners.

A corporation is a business organization created under a government charter. Ownership of a corporation is represented by shares of stock, and for that reason corporate owners are known as stockholders. One feature of the corporation is that the courts treat it as a legal «person». It can, for example, sue or be sued and enter into contracts, and it must pay taxes.

There are some other types of business organizations. They are: the corporation for small business, not-for-profit corporation, government-owned corporations, cooperatives and franchises.

V. Answer the following questions:

1. What makes people think about owning a business of their own?

2. How do many business leaders begin their careers as entrepreneurs?

3. What helps potential entrepreneurs to start and operate a business?

4. What problems do small businesses face?

5. Who does the tasks of organizing and operating in a large business?

6. What kinds of business organizations you know?

7. What are the advantages and disadvantages of sole proprietorship, partnership and corporation?

8. What other special types of business organizations do you know?

VI. Define the terms:

sole proprietorships

corporations

stockholders

taxes

partnerships

creditors

dividends

VII. Translate into English:

1. Підприємці – це люди, які мають власний бізнес і керують ним, сподіваючись одержати прибуток. 2. Тепер багато вищих навчальних закладів пропонують програми, які вчать студентів, як розпочати бізнес і керувати ним. 3. Близько 50 відсотків підприємців розпочали свою справу (бізнес) у тих галузях виробництва, в яких вони вже мали певний досвід. 4. У великому бізнесі завдання, пов'язані з організацією та управлінням, виконуються багатьма найма­ними менеджерами. 5. Великий і малий бізнес для досягнення своєї мети організовують свою роботу по-різному. 6. Акціонерне товариство, одноосібне підприємство – це різні види бізнесових організацій. 7. Одноосібне підприємство – це бізнес, яким керує одна особа.

VIII. Read and dramatize the following dialogue:

Nick: Hello, Peter. It's so nice to see you. How are you getting on?

Pete: Quite all right, thank you. And what about you? Haven't seen you for a long time. What have you been busy with?

N.: I've been pretty busy. In fact I want to talk to you about my business.

P.: Oh, I'll be glad to do something for you.

N.: I'm glad you are not in a hurry and we have time to talk today.

P.: Sure.

N.: Well, Pete. I need some legal advice. John and I are thinking of incorporating. We are going to expand.

P.: Really? It sounds interesting. It means that your partnership has been doing very well.

N.: Oh, yes, we have a success. Now some businessmen are interested in investing with us.

P.: Let me get this straight. You want to issue and sell stock in exchange investment capital, don't you?

N.: Exactly. By the way, does a corporation have limited liability?

P.: It does. Unlike the owners of sole proprietorships and partnerships who can be held personally liable for the debts of their firms the most that corporate shareholders can lose (i.e. their liability) is limited to whatever they paid for their shares of stock. Corporations are so important because of the advantages they offer over sole proprietorships and partnerships.

N.: Tell me a little about these advantages.

P.: Well. Stockholders can enter or leave a corporation at will simply by buying or selling shares of stock in that corporation. When the corporate stockholders die, their shares of stock are passed on to their heirs. Meanwhile, the corporation is free to conduct business as usual. In certain instances individuals can reduce their tax liability by incorporating.

N.: With all these advantages I wonder why there are so many more unincorporated business than incorporated ones?

P.: The answer has to do with the disadvantages of the corporation.

N.: Disadvantages? What can you tell me about them?

P.: It's difficult and expensive to organize a corporation. The process of obtaining a charter usually requires the services of a lawyer. Most small firms prefer to avoid these by forming proprietorships and partnerships. Corporations are subject to special taxes. The federal government, along with many state and local governments, taxes corporate income in addition to the taxes paid by shareholders on their dividends.

N.: What does «dividends» mean?

P.: Dividends are the portion of a corporation's profit that are distributed to the stockholders.

N.: Thank you. What other things should I know?

P.: Well. Corporations whose stock shares are sold to the public give up their right to privacy. The law requires that these large, open (or public) corporations disclose information about their finances and operations to anyone interested in reading about them. The purpose of this legislation is to give people information that helps investors and may also be of value to the competition. For that reason some corporations have chosen to remain closed (or private) corporations rather than disclose information they would prefer to keep secret. Now you seem to know a lot about business.

N.: Not everything yet, and the subject becomes quite technical.

P.: I'm glad to hear it. It's time to go now. See you later!

N.: Thank you very much for the information. Bye!

IX. Make up your own dialogue using the following expressions:

to distribute profits and losses to make a right choice

to attract customers to go into business

an amount of money to get along with

to run a risk to be liable

X. Inform the group about the future activities or states:

Model: I have the right to expect uniform product quality.

I shall have the right to expect uniform product quality.

1. Many colleges offer programs that teach students how to start and operate a business. 2. I know a lot about this business. 3. This program helps potential entrepreneurs decide whether their own ideas are good and how to follow through with them. 4. About 50 percent of entrepreneurs start their own business in industries in which they have some experience. 5. Evidence shows that people who come from families whose members were in business themselves are more likely to start their companies. 6. Many business leaders begin their careers as entrepreneurs after four years of undergraduate college training (and even additional graduate school training).

XI. Ask for confirmations of the truth of the following statements:

Model: You will call on us tomorrow.

You will call on us tomorrow, won't you?

The manager will not answer my questions on Saturday.

The manager won't answer my questions, will he?

1. A consumer will have the right to expect uniform product quality. 2. Voting won't take place at a corporation’s annual meeting. 3. Small businesses will face many problems. 4. Large and small businesses will organize in different ways to meet their objectives. 5. Sole proprietors won't have to pay the special taxes placed on corporations. 6. I shan't know a lot about this business.

XII. Translate into English:

1. Батьки сподіваються, що він стане гарним підприємцем, матиме власний бізнес І керуватиме ним. 2. Вона вже має чудовий досвід у цій галузі виробництва і, можливо, розпочне власну справу. 3. Як менеджер, він буде виконувати завдання, пов'язані з організацією та управлінням виробництвом. 4. Ми знаємо, що корпорація завжди матиме переваги над одноосібною власністю та партнерством. 5. Рада директорів обере президента та інших посадових осіб для керівництва компанією.