V. Sole proprietorship. Read and answer the questions referring to the text.

Sole proprietorship

Vocabulary

I. Study the new words. Make up as many verb (1-13) +noun (a-p) meaningful word combinations as possible. Мatch the verbs with all appropriate nouns.

1) to own _

2) to have _

3) to pay _

4) to invest

5) to raise _

6) to lose _

7) to set up

8) to run _

9) to borrow

10) to state

11) to make

12) to hire

13) to fire

a) assets

b) the right(s)

c) business

d) capital

e) debts(s)

f) the duty (-ies)

g) an enterprise

h) a firm

i) funds

j) losses

k) the liability

l) money

m) staff

n) decisions

o) the rules

p)profits

II. Fill in the table. Use a dictionary. Which suffixes can change words?

Noun	Adjective	Verb
	--------------	pay
	--------------	invest
	----------------	lose
	----------------	borrow
	------------------	trade
liability		-------------------
profit		----------------------
decision
finance
	legal	-------------------
success
failure	------------------------
responsibility		----------------------

III. Analyse the way suffixes can change words. Study the following word family. Translate the words.

Make up the word families alike with “own” and “proprietor”

IV. Before you read…..Which of these firms, in your opinion, are likely to be small business? Why?

Aerospace company Bakery

Auto repair shop Bar, café, restaurant,

Computer manufacturing Hairdresser’s shop

Computer games salon/ I-net café Pharmaceutical company

Dentist Chemist’s (drugstore)

Dress-making establishment law consultancy

V. Sole proprietorship. Read and answer the questions referring to the text.

1. What legal forms of business are described in the text?

2. How many people can own a sole proprietorship?

3. What liability has a sole trader for his / her business? What does this mean?

4. How can one raise funds to set up a sole proprietorship?

5. What happens to a sole proprietorship if its owner dies?

Having decided to set up your own business, you should choose the legal form it will take. There are three legal forms to choose from: sole proprietorship, partnership and corporation (limited company). No one form is better than another. Each has its advantages and disadvantages. The important thing is to be sure the chosen form is best for you.

Many businesses are sole proprietorships, which means that they are owned and run by one person. Setting up a sole proprietorship is easy, it does not need many formalities. As a sole trader, a person is fully responsible for the success or failure of his / her business. Any profits go to the owner, any losses are his or her responsibility as well. If losses become greater than the investment, the owner is responsible for paying them, even if this touches all personal assets. This feature is called unlimited liability.

There is no legal difference between the owner and the business. As the business is personal to the owner, it is liquidated upon the death of the owner. Finances for a sole trader are usually limited to his or her own savings or to what can be borrowed from family or friends. Therefore sole proprietorships are usually small businesses.

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