Ex. 4. Put 8-10 questions on the text so that they cover its content. Text 3. Other forms of business

1. While the main forms of business ownership are sole proprietorship¹, general partnership, and corporation, there are numerous variations that may be used in certain instances. These variations include limited partnerships, joint ventures², joint stock companies³, cooperatives, and franchises⁴.

2. ______ The law makes it possible to establish a partnership in which one or more partners are granted limited liability⁵, provided there is always at least one partner with unlimited liability. This form of ownership is a limited partnership. The partner or partners with limited liability are protected from losing more than the amount they have invested in the business because their personal assets⁶ cannot be seized. They are not, however, allowed to take an active part in managing the business. The main advantage of this type of ownership is that it allows a partnership to acquire⁷ capital from investors who do not wish to be active in the business.

3. ______ A partnership set up to carry out a temporary⁸ short-lived business project is called a joint venture. This form of ownership is often used in real estate transactions⁹ and is sometimes the initial form new corporations take when they are first being set up. A joint venture is different from ordinary general partnerships in that it terminates after its specific, one-time function has been accomplished.

4. ______ Partnerships may be established that raise capital by selling portions of ownership on the open market in the form of stock certificates. Such an organisation is called a joint stock company. It combines features of a partnership and a corporation.

5. ______ Small producers of goods or consumers of goods and services sometimes wish to band together to achieve the competitive advantage¹⁰ of larger size in the marketplace. Such groups may form a cooperative in which production, marketing, or purchasing facilities¹¹ are jointly owned and are operated mainly to provide a service to members rather than to make a profit. Consumer cooperatives attempt to achieve lower prices by buying in quantity¹² and by eliminating the profit in the final selling of goods. In a cooperative, any profit made is usually distributed to members as a rebate¹³. Members of a cooperative usually have one equal vote in running its affairs, no matter what share of ownership they may have.

6. ______ A very popular and rapidly growing form of business ownership is the franchise. This is a licensing arrangement that permits an individual to own his or her business while benefiting from the use of the trademark¹⁴, know-how, and reputation of an established firm. In return, the individual owner – the franchisee¹⁵ – pays the parent company – the franchisor¹⁶ – a royalty from part of the business's profits.

7. ______ For the parent firm, or franchisor, a franchise provides several advantages. It gives the parent firm greater control over its distribution network, limited liability, reduced investment requirements, and sometimes faster growth. For the franchisee, the system enables him or her to get into business quickly, employ proven operating methods, and benefit from mass purchasing. There are drawbacks for both sides, however: (a) increased buying power¹⁷ does not necessarily assure a profit, (b) corporate control by the parent company tends to stifle initiative at the local level where marketing flexibility¹⁸ is so necessary, (c) financial rewards to the individual are usually small in proportion to the time and effort required, and (d) profit margins¹⁹ for both the franchisor and franchisee tend to be so small that parent firms may be encouraged to buy back franchises, putting them in competition with other remaining franchises.

Notes: 1) единоличная собственность; 2) совместное предприятие; 3) акционерная компания с ограниченной ответственностью; 4) франшиза; 5) ограниченная ответственность; 6) активы; 7) приобретать; 8) временный; 9) сделки с недвижимостью; 10) конкурентное преимущество; 11) средства, оборудование; 12) покупать оптом; 13) возврат процентов; 14) торговая марка; 15) лицо, покупающее франшизу; 16) лицо или компания, владеющая франшизой; 17) покупательная способность; 18) гибкость; 19) маржа прибыли.

COMPREHENSION CHECK

Ex. 1. Read the text. Provide paragraphs 2-7 with an appropriate heading (choose among the proposed variants below):

1. The Form that Small Producers and Consumers Vote for.

2. Hybrid of Partnership and Corporation.

3. Advantages and Disadvantages.

4. The Best Form for those who Have Little Money and Have no Time.

5. The Form that is Number One Today.

6. Short-lived Business.

Ex. 2. Translate paragraphs 6 and 7 in writing.

Ex. 3. Read the text again and choose the correct alternative for each of the following questions:

1. What role does a partner with limited liability play in the limited partnership?

1. Such partner takes part in all operations of the business.

2. Such partner invests money.

3. Such partner controls the management of business.

2. What form of ownership can we refer a joint venture to?

1. General partnership.

2. Corporation.

3. Proprietorship.

3. What is the main aim of small producers' cooperatives?

1. To make a profit.

2. To buy in quantity.

3. To provide a service to their members.

4. What is the franchisor?

1. The company that possesses the trademark and know-how.

2. The company that buys the trademark and know-how.

3. All of these.

5. What is one of the main benefits of the franchise for the franchisee?

1. The franchisee can get into business faster.

2. The franchisee can get very high profits.

3. The franchisee can get an absolute control of the business.