Unit 4 Business Organisations

Business organizations belong to either the private or the public sector. The private sector consists of companies belonging to private individuals, and the public sector of companies owned by the government of the country.

There are various types of business organizations, which operate in the private sector. The simplest form is an individual proprietorship run by a sole trader: for example, a shop or a taxi owned by a single person who is entirely responsible for all the business affairs. This type of organization has certain advantages and disadvantages. Sole trader doesn’t have to consult anyone else when making decisions, the profits don’t have to be shared with anyone else. But a sole trader has to bear 100% of the risks of his company. For this reason he may have more difficulties raising capital. A sole trader has unlimited liability for his company, which

means that if he goes bankrupt, he may lose both his company and his personal property.

If two or more individuals wish to go into business together they can form a partnership.

Partners generally contribute equal capital, draw up an agreement defining the rights, responsibilities and liabilities of each partner, such as how the profits are to be distributed and what part each partner is to play in managing the company. In many countries doctors, lawyers and accountants are not allowed to form companies, but only partnerships with unlimited liability (called general or ordinary partnership) – which should make them act responsibly as in the case of bankruptcy, a partner with a personal fortune can lose it all.

There is another type of partnership – limited or special partnership, consisting of at least one general partner with unlimited liability and at least one limited partner whose liability is limited to the capital he invested. The limited partners don’t bear the risk of losing their personal property if the company goes bankrupt, but neither do they have any say in how the business is run.

In Britain, most of smaller enterprises are private limited companies (Ltd.), which cannot offer shares to the public. Their owners can only raise capital from friends or from banks.

A successful growing British business can apply to the Stock Exchange to become a public limited company (plc); if accepted it can publish a prospectus and offer its shares for sale on the open stock market.

And, as we know, firms in the public sector are owned by the government, for example the post office or the railway.

individual (sole) proprietorship - предприятие, находящееся в индивидуальной собственности; имеющее одного владельца

proprietor - собственник, владелец, хозяин

sole trader - частный предприниматель

share (v) - делить, разделять

to share smth. with smb. - делить что-либо с кем-либо

bear (v) - нести (расходы, ответственность и т. п.)

to bear responsibility - нести ответственность

to bear the expenses (losses, etc.) - нести расходы (потери и т. п.)

raise capital - привлекать капитал

unlimited liability - неограниченная ответственность

ant. limited - ограниченная

partnership (n) – товарищество

contribute (v) – вкладывать

to contribute to smth.- вкладывать во что-либо

fortune (n) - богатство, состояние

to make a fortune - накопить состояние

an enormous, large, vast fortune - огромное богатство, большое состояние

general partner - главный партнер

enterprise (n) - предприятие

a commercial enterprise - коммерческое предприятие

private limited company - частная (закрытая) компания с ограниченной ответственностью

public limited company (plc) - публичная (открытая) компания с ограниченной ответственностью

prospectus (n) - проспект компании (документ, содержащий информацию об акциях до их продажи)

stationary prospectus - окончательный проспект выпуска ценных бумаг

preliminary prospectus - предварительный проспект нового выпуска ценных бумаг