VI. Paraphrase the following sentences referring them to the past and to the future

Model: I must go there at once. I had to go there at once. I shall have to go there at once.

1. Britain must throw this opportunity away by electing a Labour government.

2. Each appointment must be confirmed by a vote of the Senate.

3. Employers who hire a worker must contact the federal government.

4. That aim must be linked to profit-sharing and share ownership.

5. The student must prove his or her capability in original research.

6. We must elect a Republican president for that national majority.

7. We must forward your account to our legal department.

8. We must work in the reading room.

VII. Paraphrase the following sentences so as to use the modal verb need

Model: I see no reason we should argue. We needn’t argue.

1. It is no use talking to him now. His mind is made up.

2. It is not necessary to copy the composition. I can read it as it is.

3. It is not necessary to take the six thirty. A later train will do as well.

4. It was quite necessary for you to do the work instead of him.

5. It was quite unnecessary to rush there in that weather. They would have managed perfectly well by themselves.

6. There is no use worrying about her: she is quite able to take care of herself.

7. There was necessity whatever for her to do it herself.

8. Why did you mention all these figures? The situation was clear as it was.

VIII. Add question tags to the following statements and give short answers

1. Before the flight you have to spend some time at the airport.

2. But we probably still have to take the weather as it comes.

3. I don’t think we need give her any more of our attention.

4. If you travel by car you needn't carry heavy suitcases and reserve your tickets.

5. They have to face the insults of supervisors.

6. There is no need to worry about your luggage any longer.

7. You do not have to fight the city traffic to get a comfortable bed for the night.

8. You needn’t be nervous about that.

IX. Fill in the blanks with to be to, to have to or must, using the correct form of the infinitive

1. All the decisions of the Government … (to approve) by Parliament.

2. Before the flight passengers … (to spend) some time at the airport.

3. Each appointment … (to confirm) by a vote of the Senate.

4. People probably still … (to take) the weather as it comes.

5. Safety belts … (to fasten) during take off and landing.

6. Students who wish to enter Oxford and Cambridge … (to take) certain exams.

7. The President … (to be) from the party that has a majority in Congress.

8. The students … (to prove) their capability in original research before a committee of senior faculty.

X. Make up sentences from the words given below

1. and; Cambridge; certain; enter; to; exams; have; Oxford; students; take; to; who; wish.

2. broad; can; economic; four; identify; of; systems; types; we.

3. able; and; appoint; are; Cambridge; own; Oxford; staff; their; to; universities;

4. between; competition; encourage; government; is; of; private; producers; role; the; to.

5. all; businesses; can; direct; government; investments; make; the; to.

6. control; enterprises; have; many; may; over; state; taken; the.

7. and; by; demand; determined; interaction; is; of; production; supply; the.

8. all; and; as; be; can; classified; economies; France; Italy; mixed; Sweden.

UNIT 13

FORMS OF BUSINESS ORGANIZATION

BEFORE YOU READ

Answer these questions

1. What forms of business organizations do you know? Which of them is the simplest and the most common one in many western countries?

2. What are their advantages and disadvantages?

READING TASKS

A. Understanding main points

Read the text below about forms of business organization and answer the questions, beginning your answers with the fol­lowing phrases: as a rule …; to tell the truth …; as far as I know …; the matter is that …; as far as I remember …; as far as I am concerned …; frankly/strictly speak­ing …; to make a long story short … .

1. What are the legal procedures for starting a proprietorship limited to? Does going out of business require any legal procedures?

2. What is the source of capital for a proprietorship? What can creditors claim to pay off the debts of the business if a proprietorship fails?

3. What form of organization is used to avoid the problem of unlimited liability? Is starting a partnership more complex than starting a corporation?

4. Whom do we call general partners, limited partners, silent partners and secret partners?

5. How many general partners does a limited partnership have? What are their duties?

6. Why do you think many medical, legal and other professional partnerships decided to incorporate?

7. Have there always been huge partnerships along with small ones? What ways have superpartnerships like the big accounting and law firms developed?

8. When do partnerships have more advantages than sole proprietorships? What disadvantages do partnerships have?

9. Are there any ways of raising capital? What are they?

10. What is a business corporation? Who is it operated by?

11. What are the shares of ownership represented by? What is a stockholder?

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

B. Understanding details

Mark the statements T (true) or F (false) according to the information in the text. Give your reason using the fol­lowing phrases: as a matter of fact ...; I don't think so …; I'm of the same opinion …; in my opinion …; on the contrary …; strictly speaking ...; to my mind ... .

1. The proprietorship is the simplest and the most common form of business organization in all the countries of the world.

2. Starting a partnership is much more easier than starting a proprietorship.

3. It is very easy to start a partnership but difficult to go out of business.

4. Ways of raising capital are similar under different forms of business organization.

5. The source of capital for a proprietorship is usually the owner’s own savings and loans from banks.

6. A limited partnership has one or more limited partners who put up some capital, run the business and bear the liabilities of the business.

7. The reverse of the silent partner is a general partner — a person who takes part in management but who is not known to the public.

8. In such professional fields as law, medicine, accounting, insurance and stockbrokerage corporations have long been the main form of business organization.

9. Superpartnerships have not developed ways to cope with the liability problems.

10. Partnerships have more advantages than sole proprietorships if one needs a big capital or diversified management.

11. Partners are not responsible for all debts and are not legally responsible for the whole business.

12. A business corporation is an institution operated by individuals and established for the purpose of making profit.

FORMS OF BUSINESS ORGANIZATION

A business may be privately owned in three different forms. These forms are a sole proprietorship, a partnership and a corporation. Proprietorships, partnerships, and corporations have certain advantages and disadvantages. Of the three basic forms, the proprietorship is the simplest and the most common form in many western countries. The legal procedures for starting a proprietorship are limited to registering the company’s name. Going out of business is also very easy: no legal procedures are required. Simplicity has its advantages but it is not the only thing to consider when choosing the right form of business organization. In the United States more than eighty per cent of all businesses are sole proprietorships. But it is evident that sole proprietorships do not do the greatest volume of business. They account for only sixteen per cent of all business receipts. In the USA service industries such as laundromats, beauty shops, different repair shops and restaurants are likely to be a sole proprietorship.

Ways of raising capital are different under different forms of business organization. A major difference among organizational forms is the degree to which owners are personally liable for debts of the business. The source of capital for a proprietorship is usually the owner’s own savings and loans from banks. If a proprietorship fails, creditors can claim the owner’s property to pay off the debts of the business.

To avoid the problem of unlimited liability a special form of organization known as the limited partnership is used. A partnership is an association of two or more persons to carry on a business for profit. Starting a partnership is less complex than starting a corporation, but somewhat more so than starting a proprietorship.

A limited partnership has one or more general partners who put up some capital, run the business and bear the liabilities of the business. In addition, there are one or more limited partners who put up capital but have no voice in the day-to-day management of the firm and do not share its liabilities. The limited partners are in much the same position as stockholders in a corporation. There may be a silent partner as well — 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 a 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. Limited partnerships are a common form of ownership in real estate, oil prospecting, quarrying industries, etc. In such professional fields as law, medicine, accounting, insurance and stockbrokerage partnerships have long been the main form of business organization. Recently, however, things have changed further. Many medical, legal and other professional partnerships decided to incorporate.

Along with small partnerships there have always been huge ones. Superpartnerships like the big accounting and law firms have developed ways to cope with the liability problems.

Partnerships have more advantages than sole proprietorships if one needs a big capital or diversified management. Like sole proprietorships they are easy to form and often get tax benefits from the government. Partnerships have certain disadvantages too. Each partner is responsible for all debts and is legally responsible for the whole business. Another disadvantage is that partners may disagree with each other.

More capital can be raised by bringing in partners or by incorporating. 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 that the corporation attracts a large amount of capital and 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.

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