Language practice

I. Match the words their definitions.

a) liability 1) one who shares something with another

b) business 2) a general inclination, direction or course

c) investment 3) the act of investing money to gain interest

d) partner 4) exclusive ownership, control or possession

e) motive 5) an industrial or commercial establishment

f) revenue 6) gain, interest, profit

g) monopoly 7) the condition or state of being liable

h) trend 8) something which causes a person to act

II. Complete the sentences below using the information of the text.

1. A company which allows to sell its product or service is called a … . 2. A company which invests the capital and receives a well-known or well-supported product or service is called a … . 3. Limited … is associated with private sector firms. 4. Profit is the … for the risk of being in business. 5. Limited liability brings benefits to the owners of the company and to the … . 6. … have similar advantages and disadvantages to sole traders. 7. A company which cannot advertise its shares for sale to the public or through the Stock Exchange is called a private ... company. 8. Privatized … can be created from the public sector monopoly.

III. Say whether these statements are true or false, and if they are false say why.

1. Organizations in the UK economy can be classified according to their business objectives only. 2. Three key concepts associated with private sector firms are ownership, profit and limited liability. 3. The owners are employees with a profit motive, profit being the reward for the risk of being in business. 4. Limited liability brings benefits only to the owners of the company. 5. Limited liability encourages people to set up in business. 6. The additional forms of private sector business ownership are sole traders, partnerships and limited liability companies. 7. Sole traders and partnerships are two forms of incorporated business. 8. A sole trader business is the easiest and least expensive to establish. 9. Benefits of a sole trader business include long working hours, limited specialist knowledge and unlimited liability. 10. Partnerships are associated with professions such as dentists and accountants. 11. Partnerships tend to be smaller but with access to more capital. 12. The owners of a private limited company can keep the affairs of the company more private. 13. Important recent developments in the UK economy include the growth in franchising as a form of business cooperation. 14. The franchisor can expand without the need for major capital investment. 15. The public sector provides goods and services through either private corporations or state authorities. 16. The government has received the revenue from privatization.

IV. Answer the following questions.

1. How can organizations in the UK economy be classified? 2. What are two key concepts associated with private sector firms? 3. What does the fact that an organization is in the private sector normally mean? 4. Why do people set up private sector firms? 5. With what is limited liability associated? 6. To whom does limited liability bring benefits? 7. Why does limited liability encourage people to set up in business? 8. What are the main forms of private sector business ownership? 9. What do their business objectives include? 10. What are two forms of unincorporated business? 11. What are benefits and drawbacks of local service firms? 12. What professions are partnerships associated with? 13. How many categories of limited company do you know? What are they? 14. What is the difference between a private limited company and a public limited company? 15. What do important recent developments in the UK economy include? 16. How does the public sector provide goods and services? 17. What was the reason to sell public corporations to the private sector?