Тема 13

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Forms of ownership

I. A business may be privately owned in three different forms. These forms are the sole proprietorship, the partnership, and the corporation.

2.The sole proprietorship is the simplest organizational form. The is one owner, who usually takes the title of president. He or she can make decisions without consulting anyone. The sole proprietorship is the most common in many western countries. More that 80 % of all businesses in the USA are sole proprietorships. They are service industries such as Laundromats, beauty shop, different repair shops, restaurants.

3.A partnership is an association of two or more persons to carry on a business for profit. When the owners of the partnership have unlimited liability they are called general partners. If partners have limited liabilities they are limited partners. Any business may have the form of the partnership, for example, in such professional fields as medicine, law, accounting, insurance, stockbrokerage. Limited partnerships are a common form of ownership in real estate oil prospecting, quarrying industries, etc.

4.Partnerships have more advantages than sole proprietorships if one needs a big capital or diversified management. They are easy to from and often get tax benefits from the government. But partnerhips have certain disadvantages too. One is unlimited liability.It means that each partner is responsible for all debts and is legaly responsible for the whole business. Another disadvantage is partners may disagree with each other.

5. A business corporation is an institution established for the в of making profit. The shares of ownership are represented by stock certificates. A person who owns a stock certificate is called stock-holder.

6. There are several advantages of the corporation. The first is the ability to attract financial resources. The next advantage is that if the corporation attracts a large amount of capital it can invest it in plants, equipment and research. The third advantage is that a corporation can offer higher salaries and attract ta­lented managers and specialists.

7. The privately owned business corporation is one type of a corpo­ration. There are some other types too. Educational, religious, charitable institutions can also incorporate. Usually such corpo­ration does not issue stock and is nonprofitable. If there is a profit it is reinvested in the institution rather than distributed to private stockholders.

Answer the following questions:

1. what are three different ways that a business can be privately owned?

2. What forms do most European countries have?

3. Name some businesses that are likely to be sole proprietorships. Why do you think so?

4. What is the difference between general partnership and partnership?

5. In what professional fields are the partnerships found?

6. In what businesses is the partnership a common form?

7. What are the advantages of the partnership?

8. What are its disadvantages?

9. Who can own a corporation?

10.What are the advantages of the corporate form of ownership?

11.What kinds of corporations don't issue the stock usually?

12.What world-known corporations do you know?