Topics (Темы)

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How to start your own business (Как начать собственное дело) Sole proprietorship

(Частная собственность)

There are three forms of business organization. These three forms are: the sole proprietorship, the partnership and the corporation. The sole proprietorship is one of the most common types. Some service industries such as beauty shops, different repair shops, restaurants and cafés are likely to be sole proprietorships.

If you are going to start your own business alone it would be sole proprietorship. There are some characteristics of this form of business. First of all, you needn’t consult a lawyer to form the business. You can start or you can stop your business whenever you like. One more advantage is that there is no need to consult partners or a board of directors. You decide on your vacation hours, salary, hiring and firing. You make the decisions and control the profits yourself. But there are some disadvantages. You have unlimited liability, it means that you are responsible for all your business debts. You won’t get tax benefits. And if your business fails you have to declare personal bankruptcy and you can lose your personal assets.

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Partnerships (Партнерства)

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 liability they are “limited partners”. Also, there may be a silent partner – a person who is known to the public as a member of the firm but without authority in management. The reverse of the silent partner is the secret partner – a person who takes part in management but who is not known to the public.

Any business may have the form of the partnership, for example, in such professional fields as medicine, law, accounting, insurance and stockbrokerage. Limited partnerships are common form of ownership in real estate, oil prospecting, quarrying industries, etc.

Partnerships have many advantages. Partnerships are good when you need a big capital or diversified management. Partnerships are easy to form and they often get tax benefits from the government.

One more advantage is that you can invest less capital than your partner – even no money at all. But you can contribute important services or skills, sometimes just a name or a reputation.

But partnerships have certain disadvantages too. One is unlimited liability. It means that each partner is responsible for all debts and legally responsible for the whole business. Another disadvantage is that partners may disagree with each other.

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Corporations (Корпорации)

A business corporation is an institution established for the purpose of making profit. It is operated by individuals. Their shares of ownership are represented by stock certificates. A person who owns a stock certificate is called a stockholder.

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

A corporation has limited liability. It has the right to own property, to buy and sell and right to sue and to be sued.

The privately owned business corporation is one type of corporation. There are some other types too. Educational, religious, charitable institutions can also incorporate. In some western countries, cities, states, federal government and special agencies can establish governmental corporations such as state universities, state hospitals and city owned utilities. Governmental corporations are non-profit as a rule and usually they do not issue stock certificates. If there is a profit it is reinvested in the institution rather than distributed to private stockholders.

If you want to issue and sell stock in exchange for investment capital you can establish a corporation. At first you have to apply for a corporate charter. After you obtain the charter, the stockholders, as the owners, hold a meeting to organize the corporation. At the meeting you elect your Board of Directors, adopt bylaws and choose the company’s officers. The officers of the company supervise daily management, but the stockholders always have final authority. They vote at annual meetings.

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