Reading drills

1. Practise the pronunciation of the following words:

a) stress the first syllable:

operate, corporate, charter, document, grant, company, salary, private, public, specify, share, shareholder, stock, stockholder, dividend, portion, profit, profitable, ownership;

b) stress the second syllable:

establish, permission, headquarter, eventually, certificate, ability, invest, investor, equipment, research, capacity, expansion, expensive, approve, acquire, require, obtain, create, avoid, addition.

Text C

Nearly 90 per cent of all business is done by corporations. A business corporation is an institution established for the purpose of making profit. It is operated by individuals. People, who would like to form a corporation, must file for permission¹ in the state where the business will have its headquarters. If approved, a charter, government document that gives permission to create a corporation, is granted. The charter states the name of the company, address, purpose of business etc.

The charter specifies the number of shares of stock², or ownership parts of the firm. These shares are certificates of ownership³ and are sold to investors called shareholders or stockholders⁴. The money is then used to set up corporation. If the corporation is profitable it will eventually issue dividend or a check, representing a portion of the corporate profits to shareholders.

There are several advantages of the corporate form of ownership. The major advantage is the ability to acquire greater financial resources than other forms of ownership. The next advantage is that the corporation attracts a large amount of capital and can invest it in plants, equipment and research. It can offer higher salaries and thus attract talented managers and specialists. Corporations have great capacity for growth and expansion.

Corporations face some major disadvantages. It is difficult and expensive to organize a corporation. The process of obtaining a charter usually requires the services of a lawyer. Most small firms prefer to avoid these expenses by forming proprietorships and partnerships. There is also an extra tax on corporate profits. The government taxes corporate income in addition to the taxes paid by shareholders on their dividends.

Comments

1. file for permission — звернутися за дозволом

2. the number of shares of stock — кількість акцiй основного капiталу

3. certificates of ownership — свідоцтво про власнiсть

4. shareholder/stockholder — акцiонер; власник акцій

Vocabulary exercises

І. Give the Ukrainian equivalents for the following words and

word-combinations. Use them in the sentences of your own:

to establish a business; to make a profit; to form a corporation; to file for permission; a charter; to give permission; to create a corporation; certificates of ownership; partnership; the number of shares of stock; proprietorship; to attract a large amount of capital; shareholder; stockholder; small firms; an extra tax on corporate profits; corporate form of ownership; profitable; to set up corporation; the major advantage/disadvantage; to attract talented managers and specialists; to issue dividends; financial resources; to invest; corporate income.