Н.П. Морозова Limited Liability Companies in the ГюЛ. Mergers and Takeovers. Fundamentals of Entrepreneurship

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Министерство образования РФ Кузбасский государственный технический университет

Кафедра иностранных языков факультета гуманитарного образования

Limited Liability Companies in the U.K. Mergers and Takeovers. Fundamentals of Entrepreneurship.

Компании с ограниченной ответственностью в Соединённом Королевстве. Слияние и поглощение компаний. Основы предпринимательства.

(английский язык)

Методические указания для студентов экономических специальностей 2 курса

Составители Н.П. Морозова Л.К. Чадина

Утверждены на заседании кафедры Протокол № 8 от 17.05.2000

Рекомендованы к печати методической комиссией направления 521500 Протокол № 5 от 14.05.2000

Электронная копия находится в библиотеке главного корпуса КузГТУ

Кемеромо 2000

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Предлагаемые методические указания предназначены для студентов 2 курса экономического факультета.

Цель данных методических указаний - способствовать формированию у студентов навыков и умений самостоятельного чтения оригинальной литературы по специальности, умений быстро извлекать необходимую информацию в пределах проработанной тематики, высказываться по пройденным темам, аннотировать и реферировать тесты экономического профиля.

Предлагаемые для чтения и обсуждения тексты охватывают такие темы, как: акционерные компании с ограниченной ответственностью в Великобритании, слияние и поглощение компаний, развитие и основы предпринимательства, предпринимательство в России.

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SECTION 1. LIMITED LIABILITY COMPANIES IN THE U.K.

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2. Read the texts about limited liability companies in the U.K.:

I. Private Limited Company

A private limited company has the word “Limited” or the abbreviation “Ltd” in its name. A private limited company should be registered under the Companies Act and act in compliance with its Charter. The company is a legal person fully liable by the company’s obligations. The equity capital of the company is formed at the expense of deposits; the shareholders get a certificate of deposit which is not considered to be a security and as a rule can not be assigned to third persons without the consent of other shareholders of the company, that provides for the close character of the company. There are private limited companies with a single shareholder.

There is one more circumstance that limits the financial rights and hence production opportunities of the private limited companies; they are not allowed to issue debentures and announce public subscription for their shares.

Private limited companies keep statutory books which are not subject to public report. The number of members of the company is not large, usually consisting of close relatives or people knowing each other well, who united for business.

II. Public Limited Company

Public limited company is the main legal form of large firms. A public limited company is a union of investors called shareholders. It carries out business activities on the basis of the Articles of Association and is to be registered under the Companies Act. Any legal person or an individual can be a founder of the company. The shareholders are not liable by the company’s obligations. The public limited company is the most stable kind of unification of capitals as the resignation of any of its investors does not involve the liquidation of the company. The investor has a right to sell his shares without consent of other shareholders.

The initial share capital is formed by way of selling shares. During the period the initial share capital is the only source of financing of its activities. The means obtained from the sale of shares are used for the purchase of plots of land, industrial premises and offices, equipment, basic commodities (raw materials) to launch manufacturing activities. Therefore the company receives an income and also can be financed by way of issuing debentures and securing bank loans.

Thus a number of advantages make a public limited company the most effective means of concentration and centralization of capital goods and

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capital. The shareholders can return their capital only by way of selling shares at the price currently quoted on the stock exchange.

The shareholders have property and personal rights. Property rights are realised in case of liquidation of a company and in case of getting dividends. Personal rights mean the right to vote; normally a share gives a right for one vote. The decisions are to be taken by a large majority, hence the person or a legal person holding the majority interest is the one who makes resolutions. Public limited companies’ names must have the abbreviation “plc” in their name.

3. Answer the following questions:

I.1. What is a private limited company?

2.What kind of abbreviation must private limited companies have in their names?

3.How is the equity capital of the private limited companies formed?

4.What factor provides for the close character of the private limited companies?

5.What are the circumstances limiting financial rights and production opportunities of the private limited companies?

II.1. What is the public limited company?

2.Who can be the founder of the public limited company?

3.Are shareholders liable by the company’s obligations?

4.Does the investor to the public limited company need to get a special permit to sell his shares?

5.What is the role of the initial capital for the public limited company?

6.What is the additional way of financing businesses for the publicly held company?

7.What factors make the public limited company the best form of concentration and centralization of capital goods and capital?

8.How can the shareholders of the public limited companies realise their property rights?

9.What are the rights of the shareholders in a public limited company? 10.How many votes is one share equal to?

11.Is a person or a legal person holding the majority interest the most powerful in the public limited company?

12.What kind of abbreviation must public limited companies have in their names?

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13.What is the difference between the private limited company and the public limited company?

4. For each word or word-combination in A find the one in B, which has the same meaning:

A

1)to consider; 2) consent; 3) debenture; 4) majority interest; 5) liquidation;

6)company; 7) shareholder; 8) to obtain; 9) to finance; 10) share; 11) premises; 12) property; 13) capital; 14) to quote; 15) to make a resolution;

16)obligation; 17) purchase

B

a) stock; b) winding up; c) to regard; d) to make a decision; e) controlling interest; f) possessions; g) stockholder; h) agreement in opinion; i) land, building; j) firm; k) to offer a price; l) to supply with money; m) bond; n) money; o) buy; p) to receive; q) liability

5.Find in the texts the English equivalents for the following:

акционерный капитал компании; пайщикам выдается свидетельство о внесенном вкладе; которое не является ценной бумагой; без согласия других пайщиков; производственные возможности; выпускать облигационные займы; правовая форма крупных фирм; повлечь за собой ликвидацию компании; наиболее устойчивая форма объединения капиталов; держатель контрольного пакета акций; принимать решения; личные и имущественные права акционеров; право на один голос; получение дивидендов

6. Look through the texts again and say if these statements are true or false. If false, correct them.

1.General Foods is a private limited company, so its name ends in plc.

2.The private company limits its members (minimum two, maximum fifty) and restricts the right to transfer shares.

3.The equity capital of the private limited company is formed by way of receiving government subsidies.

4.In the U.K. a debenture raised by a company is secured by its assets.

5.Winding up is a process of establishing a new company.

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6.The investor of the public company has a right to sell the shares belonging to him only to the shareholders of the same company with the resolution of the shareholders’ meeting to follow.

7.Share capital is the amount of money put into a company by its shareholders when they buy shares and used to buy the items it needs to carry on its activities.

B

1. Read the text and fill in the blanks with one of the words given below: creditors; sole proprietorship; shareholders; fails; private possessions; dividends; liability; agree; partnership; shares; Stock Exchange; assets; unlimited liability; freely; market; lose

Investing in a limited company

When a limited company has started trading, you do not invest in shares by giving more capital to the company. You buy them from one of the 1... . If it is a private limited company, a shareholder can only sell 2... if all the other shareholders 3... . If it is a public limited company, shares can be bought and sold 4... , usually at a 5... . If the company is doing well and paying high 6... , then you might pay more than the face value of the shares. If it is doing badly, you might pay less than the face value of the shares. The price you pay at the Stock Exchange (or to a shareholder) for your shares is their 7... value.

If the company 8... , it will stop trading and go into liquidation. This means that all the company’s property and equipment (its 9...) must be sold and the money from the sale will be used to pay its debts to its 10... . The shareholders may 11... the money they paid for the shares. If the company still does not have enough money to pay all its debts, the shareholders do not have to pay any more money because the shareholders’ 12... for debts is limited to the value of their shares.

On the other hand, if you are an owner of a business which is not limited, for example a 13... … (owned by one person) or a 14... (owned by between 2 and 20 people) and your business fails, you will go bankrupt. In this case you might have to sell your own (your house, car, furniture, etc.) to pay all your creditors because sole proprietors and partners have

for their firm’s debts.

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2. Complete this table about the four main kinds of business in Britain.

Types of business

3.Use the clues to help you complete the puzzle. The words are all in the text "Investing in a limited company".

Clues:

1.The money shareholders put into a company to buy property and equipment so it can start trading.

2.One of the owners of a partnership.

3.The price you pay for shares when the company has started trading is their

... value.

4.To put money into a business or a bank account so that it will make a profit.

5.The sole (only) owner of a business.

6.To buy and sell goods.

7.The price written on share is its ... value.

8.Something belonging to a person or a business which can be sold.

9.One of the owners of a limited company.

10.Your legal duty to other people, e.g. to your creditors.

11.If a sole proprietorship or a partnership fails, the owners will go ... .

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12.You can only buy or sell shares in a ... limited company if the other shareholders agree.

13.A person you owe money to.

14.The shares in a … limited company can be bought and sold freely.

15.Another name for a business.

16.When a limited company fails, it goes into ... .

17.Money you owe to another person.

18.Shares in public limited companies are usually bought and sold at a ...

Exchange (which is also called a ... market).

4. Complete the following sentences with "must" or "can".

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6.Each partner ............. pay the firm’s debts with his/her own money if necessary.

7.Anyone ............. buy shares in a public limited company.

8.The name of a private limited company ............... include the word limited or the abbreviation Ltd.

9.You ........... only buy shares in a private limited company if the other shareholders agree.

10.You ............ draw up a Memorandum and Articles of Association when you start a limited company.

5. Decide what sort of business you would start in these situations. There is no one correct answer in any case and you may be able to think of more than one possibility. Give reasons for the decisions you make.

1.You and your spouse (husband or wife) want to start a grocery shop in a small village. There is already one grocery shop in the village owned by an old lady. Your bank will lend you the money you need.

2.Two couples have enough money to buy a small hotel which they will all work in. One of the couples has two young children.

3.You want to sell fruit and vegetable from a stall at the market. You need $ 500 capital which you can borrow from your father.