Step 4 Working together
Vocabulary bank
company
corporation
division
nationalized company
premises
private company
shareholder
trade union
Chief Executive Officer (CEO)
Chairperson
Board of Directors
workforce
Human Resources
personnel
Public limited company (PLC) (открытое акционерное общество) – a registered company whose shares can be bought and sold on the Stock Exchange.
Private limited company (Ltd) (частная компания с ограниченной ответственностью) is the most common form of company registered in the United Kingdom. It may be subsequently re-registered as a public company. It has a share capital but cannot offer shares to the public. Members' liability is limited to the amount unpaid on shares held in the Company.
Closed corporation (закрытое акционерное общество) - a corporation the stock of which is owned by a small number of persons and is rarely traded on the open market.
Partnership (товарищество) – owned by two or more people who contribute capital; the owners has unlimited liability, which means that the personal asserts of the owners can be taken to pay any business debts.
Limited Liability Partnerships (LLPs) are a new form of UK business entity. They enjoy the commercial benefits that come from being a body corporate and their members benefit from the protection of limited liability. Yet LLPs can operate with all the organizational flexibility of a partnership, and are taxed as such.
A sole proprietorship, also known as a sole trader or simply a proprietorship (индивидуальное частное предпринимательство), is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. Every asset of the business is owned by the proprietor and all debts of the business are the proprietor’s. This means that the owner has no less liability than if they were acting as an individual instead of as a business.
Important! There is no direct correlation between English and Russian terms.
Extension:
Describe the general organization of one company you know.
Choose two departments of a large company and describe their functions in
detail.
Speak on the advantages and disadvantages of working for a smaller
company.
Step 5 Money Matters
Vocabulary bank
a string of prestige brand names
accounts, pay into bank account
acknowledgement
air waybill
assets
assign a credit limit
bank reference
bill
cash flow
credit control
deliver
delivery note
down payment
downturn
economic slowdown
face value
free trade area
freight
gross profit
handling charge
inconsistent
interest
annual rate of interest
interest charge
launch
ledger
marginal increase
merchandise
negotiate
net profit
operating income
operating profit
overall group sales
overdraw an account
overdue payment
overseas
owe
partshipment
purchase
quotation
rectify
remittance
retail
shipment
shipping
spreadsheet
stipulate
supplier
transhipment
VAT
Factoring (факторинг) is a financial transaction whereby a business job sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount in exchange for immediate money with which to finance continued business. Factoring differs from a bank loan in three main ways. First, the emphasis is on the value of the receivables (essentially a financial asset), not the firm’s credit worthiness. Secondly, factoring is not a loan – it is the purchase of a financial asset (the receivable). Finally, a bank loan involves two parties whereas factoring involves three.
Port of discharge – the port at which cargo is unloaded
Bill of exchange ((переводный) вексель, тратта) – a document containing an instruction, usually to a bank, to pay a stated sum of money at a specified future date or on demand
Drawn at sight – a bill of exchange, payable when the beneficiary presents it at the bank, is said to be ‘drawn at sight’
Sight draft (вексель на предъявителя) is most commonly used in international trade. In a sight draft, the payment is on demand or on presentation of the negotiation documents to the paying bank or the importer. In practice, the bank may pay within three working days (not instantly) after the receipt and review of the negotiation documents and if they are in order, that is, the documents comply exactly to the letter of credit stipulations.
Incoterms ("ИНКОТЕРМС" - издание Международной торговой палаты) – a glossary of terms used in international commerce and trade, published by the International Chamber of Commerce. The most common ones are:
CIF (условие поставки «стоимость, страхование и фрахт») – the price covers Cost, Insurance and Freight to a named port of destination in the buyer’s country.
EXW (условие поставки «с завода») – the price is Ex-Works cost of the goods. The buyer arranges collection from the supplier and pays for the freight carriage and insurance.
FOB (условие поставки «свободно на борту») – the price includes all costs of the goods Free On Board a ship (or aircraft) whose destination is stated in the contract. The buyer pays for onward shipment and insurance.
Methods of payment in foreign trade:
CWO – cash with order (наличный расчет при выдаче товара). This method is uncommon since you extend credit to your supplier, in addition you run the risk that the goods will not be dispatched in accordance with the contract terms. But this is usual with mail order, where you pay by Eurocheque or cheque or by using a credit card. In business CWO contracts often include provision for partial advance payments in the form of deposits (normally between 10% – 20% of the contract price). Or they include progress payments at various stages of manufacture (particularly for capital goods). Then the remainder of the payment is usually made by one of the methods described below.
Open account (открытый счет). This is a simple agreement in which you agree to pay for the goods after you have received them, usually on a monthly basis. There are various ways in which you can send money to your suppliers under open account:
Cheque
Banker’s draft. You can arrange for your bank to issue a draft, which is a kind of cheque drawn on an overseas bank. You send this direct to your suppliers who pay it into their bank account. Then they will usually receive immediate credit.
Telegraphic transfer (interbank transfer). Your bank instructs an overseas bank, by secure e-mail, to pay a stated amount of money to you suppliers.
International payment order. You can arrange for your bank to instruct an overseas bank to make payment to you supplier, by airmail.
International money orders. You post the money order to your suppliers and they receive immediate credit from their bank in the same way as with a draft.
Documentary Bill of Exchange ((переводный) вексель, тратта). The main advantage is that you are not required to make payment until your suppliers have dispatched the goods.