Sole proprietorship

A sole proprietorship is the most common in many west­ern countries. For example, more than 80% of all businesses in the United States are sole proprietorships. But it is evident that sole proprietorships don’t do the greatest volume of business. They account for only 16% of all business receipts, for exam­ple, in the USA. What kind of business is likely to be a sole proprietorship? First of all, service industries as laundromats, beauty shops, different repair shops, restaurants.

A sole proprietorship is a business owned by one person, in which all the profits and all the debts belong to the owner, the latter being fully responsible for the success and the failure of the business. Unless an activity is specifically prohibited by law, no field of business is closed to an owner. One of the advantages of a sole proprietorship is that an owner can make decisions quickly and decisively without having to consult others. And an individual proprietor, by law, pays fewer taxes and at lower rate than does a corporation.

There are disadvantages to this form of business organization, however. In the first place, the single owner is seldom able to invest as much capital as can be obtained by a partnership or a corporation. If single owners are able to invest large amounts of capital, they run great risk of losing it all because they are personally liable for all the debts of their businesses. It is due to unlimited liability that all the personal assets of the owner, including his home and car, can be sold to settle the debts of the business. Unless the owner has much personal wealth, the business may have difficulty borrowing money in critical times. A sole proprietorship may also have difficulty employing and keeping good employees, because the business will dissolve when the owner retires or dies. The assets can be inherited by a person who may even become the operator, but legally the business dies with its owner. Also, since it is dependent upon the amount of money the owner has saved or can borrow, usually it doesn’t develop into a large-scale enterprise.

In spite of its limitations, the sole proprietorship is well adopted to many kinds of small businesses and suits the temperament of many persons who like to exercise initiative and be their own bosses.

Vocabulary

commercial enterprise – торговое предприятие

branch of industry – отрасль промышленности

business receipts – отчисления от коммерческой деятельности

laundromat – прачечная

beauty shop – салон красоты

repair shop – ремонтная мастерская

owner – владелец, собственник, хозяин

to prohibit by law – запрещать законом

advantage – преимущество

proprietor – собственник, владелец, хозяин

to pay taxes – выплачивать налоги

rate – ставка, тариф, расценка, цена

disadvantage – неудобство, невыгодное положение

to run great risk – сильно рисковать

to be liable for smth.– нести ответственность за что-либо

unlimited liability – неограниченная ответственность

personal assets – движимое имущество

to settle a debt – погасить, выплатить долг

to employ – предоставлять работу, нанимать

employee – служащий; работающий по найму

to dissolve – ликвидировать, расформировать, прекращать деятельность

to retire – выходить на заслуженный отдых, на пенсию

to inherit – наследовать, унаследовать, стать наследником

to exercise initiative – проявлять инициативу

Дата добавления: 2015-10-30