Text 2 The Sole Proprietorship

The simplest type of a firm is the sole proprietorship. This is a firm owned by a single person. All the firm's decisions are centred in him, all profit from the firm is his, and he is personally liable for all the firm’s debts. In a sole proprietorship there is no legal distinction between the personality and possessions of the owner and those of the firm. In fact the owner is the firm and is personally responsible for everything the firm does.

There are several advantages to the sole proprietorship. It is legally simple and easy to establish. Moreover the identification of the owner with the business provides a powerful incentive for efficient operation, and encourages careful weighing of the risks involved in the undertaking.

38 percent of small business owners in the USA in a survey gave the following as the main reason for going into business for themselves: to be their own boss and have more control over their work and their lives. Entrepreneurs seldom complain that running their own firm is routine and boring. It’s possible to make a lot of money. Any profit the firm makes accrues directly to the owner. So, the owners can get personal satisfaction from guiding the firm’s growth as well as from making money.

As for disadvantages, being in business for yourself requires your full attention. The owners must “wear many hats” as they can seldom afford to hire enough employees so that each can specialize and be responsible for a special aspect. You might work for months and not take a penny out. You may also have to reinvest your profits in the firm for long-term growth.

In case of failure, not only can an enterpriser lose all he has invested in the firm directly but if this is not enough to cover the firm's debts, he can be sued personally for the balance.

Overall, the two main causes of small business failures are poor management and inadequate financing.

Assignments to text 3:

1. Read and translate the headline of the text.

2. Look through the text and try to find the key sentences in which the main limitations to the size of proprietorship are formulated. How many limitations are discussed in the text?

3. Give annotation of the text before translating it into Russian.

4. Translate the text, now check:

· if you counted the limitations correctly,

· if you missed any important idea before translation.

5. After reading the text 2 and text 3 make up a plan for your report about sole proprietorship as a form of a small-scale business.

Дата добавления: 2015-11-16