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2. Complete these terms related to corporate governance.

a) a legal entity

b) qualified opinion

c) a private limited company

d) a sole proprietor

e) a public limited company (plc)

f) an unqualified opinion

  1. …….. is an individual who owns a small business.

2 .......... is a company whose owners or shareholders are not liable for the company's debts and can lose only the amount of money they have invested in the company.

3 .......... is an independent auditor's judgement that a company's financial statements are fair and in accordance with accounting regulations.

4 An organization that is.......... has the same status under the law as an individual person: it can enter into a contract, be sued if it fails to meet its contractual obligations or prosecuted if it commits a criminal act.

5 .......... is a company which offers shares for public purchase. It must have a minimum of share capital (over £500,000) and can be listed on the London Stock Exchange, where shares can be traded freely amongst investors.

6 .……… is a statement by an auditor that information included in a company's accounts is not complete or that the accounting methods used do not follow accounting regulations.

Paste your answers accordingly

1

2

3

4

5

6

3. Complete this extract from an mba textbook using terms from the previous text. The first letter of each term has been provided.

The Role of the Board

According to the UK c..... of c..... g……, shareholders have the role of appointing the b...... of d..... These directors are f....... that is agents on behalf of the shareholders, with c..... responsibility for the success of the company and a........ for its failures. In other words, they must demonstrate good s...... taking care of the company for which they are responsible and always showing openness, or t...... towards their p........, the shareholders. The board should include non-e....... directors, responsible for ensuring that objectives are reached. Supervising the effectiveness of the board is the c....... The d........ of responsibilities between the chairman and CEO should be clear to avoid any potential c........ of interest, given the amount of i....... information to which they have access.

Election of the board is carried out during the A..........G.........M......... which serves as a forum for shareholders to elect or remove the chairman, question the board's decisions, raise issues of the fairness of executive c..........., where necessary, and appoint the e.......... a.......... accountants from a specialist accounting company who check the company's balance sheet.

Serving on a board involves some amount of r........, which can take the form of i........ to stimulate performance, such as b....... , extra payments directly related to performance, or s........ o....... which link e..........' wealth to that of the company. In all their activities, the directors and shareholders are responsible for conforming to the national laws such as the C.......A........ (UK) and its equivalents worldwide, such as the US anti-trust laws.

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