Н.П. Морозова Forms of business organization Формы организации предприятий (английский язык)

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Методические указания предназначены для студентов 2 курса экономических специальностей.

Цель данных методических указаний помочь студентам овладеть умением читать и понимать оригинальные тексты, говорить на темы организации предприятий разных форм собственности, а также расширить их активный словарный запас.

Методические указания состоят из четырёх разделов (Section 1,2,3,4), включающих оригинальные тексты на следующие темы: Индивидуальные предприятия, Товарищества, Корпорации.

Завершает методические указания обзорный тест.

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SECTION 1. TYPES OF BUSINESS ORGANIZATION

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1.Words and expressions to be memorized:

business - дело, работа, бизнес; компания, фирма,

2.Read the international words and give their Russian equivalents: form; organization; structure; risk; information; credit; contract; stability; adequacy; critical; factor; personal; basic; firm; control; operation; nature.

3.Read the text:

Forms of Business Organization

Every business must have a business structure. Each of the available options carries with it certain benefits, risks and rules of operation that must be followed. The nature and condition of a business’s structure is a significant part of the information that other

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businesses consider in making credit and contract decisions. The stability of the structure, the adequacy of capitalization, and the amount of liability of the owners are all critical factors in the decision to buy, sell or extend credit. The way even boards conduct business is subject to judicial scrutinity, and board members can experience personal liability for failure to honor business structure rules.

This work discusses the various structures a business can have, how to create them, how to preserve them, and what can go wrong when they are operated incorrectly.

When a business first begins, its owner or owners must decide what structure or form it will take. This structure will determine many things about the business, including the liability of its owners under various circumstances.It also will affect those who do business with the firm , controlling how much sellers and customers will be paid or will receive on arrangement. It thus becomes important to understand the structure not only of one’s own business but also of the other firms with which one deals.

The three basic forms of business organization are the sole proprietorship, partnership and corporation.

4.Look through the text and find equivalents of the following Russian wordcombinations and sentences:

5.Любой из имеющихся вариантов несет с собой определенные выгоды, риск и правила работы.

6.Решения о выдаче кредитов и заключении контрактов.

7.Личная ответственность за невыполнение правил структуры фирмы.

8.Как создавать деловые структуры, как их сохранять и что делать, если ими управляют неправильно.

9.Когда какая-либо фирма зарождается, её владелец или владельцы должны решить, какую структуру или форму она примет.

5.Read the text again and answer the following questions:

1.What do businesses consider in making credit and contract

decisions concerning other businesses?

2. What factors are critical in the decision to buy, sell or extend credit?

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3.What must an owner decide when he or she first starts a business?

4.What things about a business can be determined by its structure?

5.What are the three basic forms of business organization?

2. Read and translate the following international words and word-combinations:

start v.; type;consult; secrecy;financial;confidential;individual n., a.; limit v; limited; potential n; resources; managerial problems; сommercial seсret; fund; service business; lеgal; register n., v.; activity; public report; creditor; contract v.; personally; bankruptcy; statistics; result; rating

3. Read and translate the verbs and their derivatives: to agree - agreement

to decide - decision - decisively

to depend - dependence - independence – dependent - independent to establish - establishment

to exist - existence to fail - failure

to inherit - inheritance

to invest - investorinvestment to operate – operator - operation to own – owner - ownership

to regulate - regulation to require - requirement to sell – seller

4. Read the text:

Sole Proprietorship

This structure marks the truly informal business.There are no requirements for its formation. One person owns and generally

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operates the business. That person receives all income and also bears all losses and liabilities.

Sole proprietors are individuals carrying out economic operations and concluding commercial deals on their own behalf. The sole proprietorship is the easiest form of business to start if funds are limited, and most farms, retail stores, small service businesses, and part - time businesses run from the home have this type of ownership.

The legal form is not to be indicated in the name of the firm. The hired staff are not referred to as proprietors.

The proprietors must be registered in the trade register, obtain a licence to carry out business activities and keep the books reflecting the results of the latter. The contents of the books are a commercial secret not accessible to a third party. In case of a lawsuit the books can be open for the court and the parties concerned provided the proprietor acts either as a plaintiff or a defendant. Also, the books can be made public in case of either insolvency or inheritance.

Sole proprietors are not subject to public report therefore it is not possible to get true information of their activities.

Many sole proprietorships operate under a “doing business as” (d/b/a) name and that name sometimes hides the fact that the business is a sole proprietorship. It is important for creditors and sellers to verify the nature of the business and find out who is liable for the firm’s contracts and agreements. Indeed, the signature of the sole proprietor, not the name of the business, is necessary in order to have a valid contract because the business as such has no legal existence and cannot contract - only the owner can.

One of the advantages of a sole proprietorship is its independence. An owner works for himself or herself and can make decisions quickly and decisively without having to consult others. Except for the compliance with statutes and regulations, the owner is free to deal as he or she sees fit.

Other advantages of the sole proprietorship include ease of establishment, secrecy (financial data can remain confidential), and the tax advantage-an individual proprietor, by law, pays fewer taxes and at a lower rate than does a corporation.

There are disadvantages to this form of business organization, however. The limited potential for profit is one of them. Such

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businesses are typically started with limited resources, because there are limits to the amount of money a single individual can raise. Also, since it is dependent upon the amount of money the owner has saved or can borrow, usually it doesn’t develop into a large-scale enterprise.

Managerial problems may also develop, because the owner may be too personally involved in the business to seek aid or may not be able to afford the help that’s needed.

Sole proprietorships also suffer from unlimited liability meaning that any damage or debt that can be attributed to the business can also be attached to the owner. So, there is no one to turn to for the collection of debts except the sole proprietor. If the losses prove to be greater than the investment, the individual is responsible for paying them, even if this depletes all personal assets. To satisfy a business debt the owner’s home may be taken.

The business may also be disadvantaged by limited life. The sole proprietorship ends with the incapacity or death of the owner. The assets can be inherited by a person who may then become the operator, but legally the business dies with its owner.

Because of the ease of formation and the ability to declare personal bankruptcy as a halt to the business, these types of firms present greater risks in credit extension. The credit rating of the firm is the credit rating of the proprietor. Sole proprietorships usually do not last long in this form. They either go on to different forms of existence in order to raise capital or become part of the statistics on failed businesses.

5. Find in the text the answers to the following questions:

1. Why is it correct to say that the sole proprietorship is truly informal business?

2. What is a sole proprietorship ?

33. In which spheres of business do sole proprietors normally work ?

4.Must the name of the sole proprietors be indicated in the name of the firm ?

5.Are people hired to work in the sole proprietorships considered

to be proprietors ?

1. In what cases can the books of the sole proprietorships be made public ?

7. How do many sole proprietorships operate ?

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8.What is the tax position of a sole proprietorship ?

9.What does unlimited liability mean ?

10. Does the sole proprietorship end with the incapacity or death of the owner?

11. Why do sole proprietorships present greater risks in credit extension?

6. Find in the text the English equivalents for the following:

к единоличному владению не предъявляется никаких требований касательно его создания; заключаются коммерческие сделки; служащие, работающие по договору найма; юридическая форма; быть зарегистрированным в торговом реестре; вести торговые книги; выступать в качестве истца или ответчика; заинтересованные лица; подлежать публичной отчетности; ведет дело под именем; необходима подпись единоличного собственника, а не название фирмы; фирма как таковая не существует с юридической точки зрения

ине может заключать договоры.

7.For each word in A find the one in B which has the same meaning:

A. 1.business; 2. to own; 3. to operate; 4. liable; 5. proprietor;

36.to carry out; 7. proprietorship; 8. staff; 9. insolvency; 10. fit; 11.statute; 12. data; 13. to deplete; 14. aid; 15. halt; 16. to last; 17. to hire.

B. a) information; b) personnel; c) to possess; d) stop;

e)responsible; f) a written law; g) owner; h) bankruptcy; i) firm;

j)right and suitable; k) to fulfil; l) to work; m) to lessen greatly;

n)to employ; o) ownership; p) to continue; q) help.

8. Fill in the gaps with prepositions:

1. it is dependent ... the amount of money the owner has saved. 2. there is no one to turn ... for the collection of debts.

3. It is important ... creditors and sellers to verify the nature of the business.

4.who is liable ... the firm’s contracts and agreements.

5.present greater risk ... credit extension.

6.the credit rating ... the firm.

7.do not last long ... this form.

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8.part of the statistics ... failed business.

9.Write in the advantages and disadvantages of the sole proprietorship in note form.

Discuss the advantages and disadvantages like this:

On the one hand the sole proprietorship is the easiest form of business to start, but on the other hand it has the tendency to be small in size and profit

and like this:

Although the sole proprietorship is easy to start there is limited potential for profit.

10. Prepare yourself to give a short talk about any of these subjects:

1. What is a sole proprietorship and how to start it?

22. The advantages the sole proprietorship enjoys.

3.The disadvantages of the sole proprietorship.

4.Imagine you are a seller or a creditor. What should you know about sole proprietorships?

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Read the text, give a title to it and do a written translation:

In spite of its limitations, the sole proprietorship is well adapted to many kinds of small businesses and suits the temperament of many persons who like to exercise initiative and be their own bosses. Some economic contributions of small business are:

•A small business is often the starting point for developing a new product or service. One person tries out an idea. If it is successful, the business grows, or the product may be bought by a larger firm.