Forms of Business Organizations

Look through the list of English words and their Russian equivalents before reading the text:

1. sole proprietorship (n)	единоличное владение
2. to exist (v)	существовать
3. to own (v)	владеть
4. unlimited liability (n)	неограниченная юридическая ответственность
5. to run (v)	управлять
6. to create (v)	создавать
7. to be responsible for (v)	быть ответственным за что-либо
8. partnership (n)	партнерство
9. to recover one’s money (v)	вернуть свои деньги
10. debt (n)	долг
11. disadvantage (n)	недостаток
12. to be subject to taxation	подлежать налогообложению
13. to issue (v)	В выпускать

A business may be privately organized in three different forms. These forms are the sole proprietorship, the partnership and the corporation. Most business firms are created and exist to make a profit.

A sole proprietorship is a form of business organization owned and operated by one person. Sole proprietorships are the most numerous kind of business organization, but most of them are very small. Sole proprietors own all the profits of their enterprises, and they are “own bosses”. They don’t have to pay the special taxes placed on corporations. Among sole proprietors are farmers, professional men, small storekeepers and small manufacturers.

The greatest disadvantage of a sole proprietorship is unlimited liability that each proprietor faces. Liability refers to legal obligations to pay for debts or damages. Other disadvantages may include lack of opportunities for employees, limitations of size and growth and lack of management resources.

A partnership is a form of business organization that is owned and run by two or more persons. Partnerships are easy to form, relatively small to control and often get tax benefits from the government. Partnerships are not subject to special taxation. Partnerships can be found in such professional fields as medicine, law, accounting, insurance.

In many cases partnerships have unlimited liability. Each partner is both jointly or separately responsible for all the debts of their business. If the business fails, its creditors have the right to recover their money from any, or all, of the partners.

A corporation is a form of business organization created under a government charter.

A corporation may issue and sell stock certificates. A person who owns a stock certificate is called a stockholder. Shareholders are the owners of a corporation and their shares of ownership are represented by stock certificates.

A corporation is managed by the Board of Directors.

It is difficult and expensive to organize a corporation. The process of obtaining a charter usually requires the services of a lawyer. Corporations are subject to special taxes.

Ex. 1. Match the English words with the appropriate Russian equivalents:

1. profit	a) бухгалтерский учет
2. lack of opportunities	b) держатель акций
3. accounting	c) устав, привилегия
4. shareholder	d) обязанности
5. charter	e) прибыль
6. obligations	f) совет директоров
7. the Board of Directors	g) недостаток возможностей
8. insurance	h) страхование

Ex.2.Give English equivalents from the text:

Единоличные владельцы, прибыль, производители, налоги, подлежать налогообложению, держатели акций, услуги юриста, устав, совет директоров, неограниченная юридическая ответственность, недостаток возможностей, долг, сталкиваться, недостаток возможностей, бухгалтерский учет.

Ex.3. Say whether these statements are right or false:

1. A business may be organized in four different forms.

2. A sole proprietorship is a form business organized and operated by two persons.

3. Sole proprietors have to pay special taxes.

4. A partnership is a form of business organization that is owned and run by two or more persons.

5. Partnerships are easy to form, relatively small to control and often get tax benefits from the government.

6. If a partnership fails, its creditors don’t have the right to recover their money from any, or all, of the partners.

7. A corporation may issue and sell stock certificates.

8.A person who owns a stock certificate is called a broker.

9. Corporations are subject to special taxes.

Ex.4. Answer the questions:

1. What are the forms of business organizations?

2. What is the main purpose of business organizations?

3. What is a sole proprietorship?

4. What is the greatest disadvantage of a sole proprietorship?

5. What is a partnership?

6. Who is responsible for all business debts in a partnership?

7. What form of business organization is created under a government charter?

8. Who can be an owner of a corporation?

9. By whom is a corporation managed?

Ex.5.Complete the sentences:

1. Most business firms are created and …

2. A sole proprietorship is a form…

3.Among sole proprietors are…

4. A partnership is a form of organization that…

5. Partnerships can be found in…

6. Partnerships are easy to form, relatively small…

7. A corporation is a form of business organization…

8. Shareholders are the owners of corporation and their shares…

9. A corporation is managed…

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