4. Holding company

► Ex. I Scan through the text. Restore the word order in the questions that follow and answer them.

Holding company is a company that owns enough voting stock (a controlling number of the shares) in one or more other com­panies to exercise control over them. A company that exists ex­clusively for this purpose is called a pure holding company, while one that also engages in a business of its own is called a holding-operating company. A holding company typically owns a majority of stock in a subsidiary (a company that is owned or controlled by another company), but if ownership of the remain­ing shares is widely diffused, even minority ownership may suffice tq give the holding company control. A holding com­pany provides a means of control of several companies with a minimum amount of investment. The use of a holding company is legally simpler and less expensive than other means of gain­ing control of another company, such as, for example, merger (the act of joining together two or more companies to form a single enterprise). A holding company is able to reap the bene­fits of a subsidiary's goodwill (the success of a company, and its good relationship with its customers, calculated as part of its value when it is sold) and reputation, yet its liability is limited to the proportion of the subsidiary's stock that it owns. These and other factors make holding companies an effective form of organization on both national and international levels.

Holding company - холдинг компания; voting stock = con­trolling number of the shares; stock - акции; exercise - выполнять; exclusively - исключительно; engage - заниматься; majority - большинство; subsidiary -подконтрольная компания; ownership - владение; diffuse - распространять; suffice - хватать; gain - добывать; merger - поглощение; слия­ние: reap - пожинать плоды; goodwill - престиж фирмы; liability - денежные обязательства.

1) What by the term "holding company" is meant? 2) What is by the term "voting stock" meant? 3) What is company called a pure holding company? 4) What company called a holding-operating company is? 5) What by the term "subsidiary" meant is? 6) What stock the holding company control over its subsidi- агу gives? 7) What company a means of control of several companies with a minimum amount of investment provides? 8) What the simplest way to gain control of another company is? 9) What by the term "merger" is meant? 10) What by the term is "goodwill" meant? 11) What a holding company is able to get? 12) What a holding company's liability is limited to? 13) What an effective form of organization on both national and international levels is?

► Ex. II. Agree or disagree with the following statements.

1) Holding company is a company that holds a control packet of shares in other companies. 2) Controlling interest is ownership of more than 50 per cent of a business. 3) If you have a control­ling interest in a company, you own enough shares to be able to make decisions about what happens to the company. 4) Holding company controls the composition of the board of directors of the subsidiary company. 5) Goodwill is the favor or prestige that a business has acquired beyond the mere value of what it sells. 6) Holding company is an inefficient form of organization.

Ex. III. Translate the following questions from Russian into English and answer them.

1) Холдинг-компания - это компания, владеющая кон­трольным пакетом акций других компаний с целью осуще­ствления контроля над их операциями? 2) Контрольный пакет акций - это доля акций, сосредоточенная в руках од­ного владельца и дающая возможность осущест влять фак­тический контроль над акционерным обществом? 3) Гуд­вилл - это условная стоимость деловых связей фирмы? 4) Гудвилл - это престиж торговых марок, опыт деловых связей, устойчивая клиентура, не так ли? 5) От чего зависит престиж компании? 6) От чего может пострадать репутация компании?

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► Ex. IV. Complete the following statements. Choose one topic to speak about a) pure holding company; b) holding-operating com­pany; c) the use of a holding company; d) company's goodwill; e) subsidiary company. Retell the text “Holding company”.

1) Holding company is ... 2) ... is called a pure holding com­pany. 3)... is called a holding-operating company. 4) A holding company typically owns ... 5) Minority ownership may ... if ... 6) A holding company provides ... 7) The use of a holding company is ... 8) A holding company is able to ... 9) A holding company's liability is limited to ...