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

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partnership agreement the interest of the married partners and state whether their spouses have disclaimed (отказаться) any interest or have accepted some other property in lieu (взамен) the partnership interest.

5. What if a partner becomes ill or disabled (нетрудоспособный,

инвалид)?

Partnerships give too little thought to the possibility of a partner to become ill, incapacitated (лишенный трудоспособности), or in some way disabled either for an extended period of time or permanently (постоянно). Sometimes partnerships rely heavily on that partner’s skills. The partnership agreement should have a provision (положение) to deal with disability that covers the partner’s share of profits during the time of disability and the consequences (последствия) if the disability becomes permanent. Again, insurance coverage can help here. So can setting a time limit for disability, typically six months. Most businesses can survive for six months in a holding pattern (временно), but permanent changes should be made after that time.

6. What if disagreements between the partners occur?

The optimism of forming a business usually carries with it the idea that partners will always get along (ладить). Unfortunately, disagreements occur sooner or later, and they may become so intense that the business loses customers. For example, two police officers formed a firm to install home security systems. The officers initially were close friends. As their business began to do well, however, they began to disagree with each other, and they often carried on (продолжaли) arguments while they installed the security systems in people’s homes. This annoyed (раздражать) many customers and cost the partners the customer recommendations that are the main means of advertising in this type of business.

Many partnership agreements include arbitration (арбитраж) or mediation(посредничество) provisions for the resolution of disputes. Such provisions should be followed by others stating what will happen to the business if disagreements cannot be resolved, including whether one partner can buy out(выкупать) the other and, if so, how the interest will be valued.

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2. Read the text and render it in Russian and then in English:

(II) Limited Partnership

The limited partnership is a contractual union of entrepreneurs (предпринимателей) participating only by the way of contributions without taking direct part in management (investors) ; and those who apart from (кроме) contributing carry out direct management of the partnership and are fully liable by the partnership’s obligations with their own property (full members).

It takes at least one full member and one investor to form a limited partnership. The limited partnership is to be registered just like any unlimited partnership.

The name of the partnership includes the names of one or two full members; the including of the name of the investor into the name of the firm makes the investor equally and jointly liable by the partnership’s obligations.

3. Read the text and render it in Russian and in English:

(III) А Partnership

A partnership is a legal association of two or more persons as coowners of a business. The partners share profits, losses, and usually the management responsibilities as well. When all the partners are legally equal and equally liable for the firm’s debts, the business is a general partnership. If, however, in addition to one or more partners acting as general partners and running the business, there are others whose liability is limited to the amount of their investment, the partnership is then said to be a limited partnership.

Partnerships are easy to form, and they often have a greater profit potential than sole proprietorships because a number of individuals are pooling their talents. In some industries, the possibility of becoming a partner is an incentive(побуждение, мотив) for talented employees.

Partnerships benefit from having a definite legal standing, as the partners typically have a legal agreement between them. And although each general partner has unlimited personal liability for debts, partnerships typically have a high credit rating owing to the combined talents of the various owners. Still further, and in contrast to sole proprietorships, partnerships may have an unlimited life span, as new partners can replace retiring ones.

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Unlimited liability is a major disadvantage of the partnership. This form of business ownership may also suffer from interpersonal problems among the partners and management difficulties resulting from too many partners having a say in the business’s daily operations. Additionally, in large partnerships, employees may become extremely competitive when they aspire (стремятся) to become partners.

E

1. You are to make a report “Forms of business organization” at the annual students' conference. Your information is in Russian and you have to translate it into English:

(I)	Полное Товарищество
	Полное товарищество - это ассоциация двух и более лиц (в

Великобритании до 20 человек), занимающаяся тем или иным бизнесом с целью получения прибыли. В Великобритании их деятельность регулируется Законом о товариществах 1890 г. В отличие от акционерной компании товарищество не является юридическим лицом, поэтому партнеры несут неограниченную ответственность по обязательствам товарищества (всем своим имуществом).

(II)	Коммандитное Товарищество
	Коммандитное	товарищество	включает	основных

партнеров, управляющих делами товарищества и несущих полную ответственность за его долги перед кредиторами, и партнеров с ограниченной ответственностью, не принимающих активного участия в управлении товариществом и несущих ответственность за его долги только в размере своего взноса в товарищество. В Великобритании деятельность таких товариществ регулируется законом о товариществах с ограниченной ответственностью 1907 года.

( III)	Открытое Коммандитное Товарищество
	Открытое коммандитное товарищество сочетает в себе

черты коммандитного товарищества и открытого акционерного общества. От простого коммандитного товарищества оно отличается тем, что имеет право выпускать и пускать в открытую продажу свои акции, которые могут котироваться на бирже. При этом полные партнеры несут неограниченную ответственность по долгам такого товарищества, а держатели его акций - только в размере своего взноса в него.

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Доходы товариществ не облагаются корпоративным налогом (corporation fax), т.е. налогом на прибыль компаний. Участники товарищества включают доходы от его деятельности в свой личный доход, облагаемый налогом по ставкам подоходного налога для физических лиц.

В настоящее время практика организации фирмы в форме товарищества является не очень распространенной. В основном это адвокатские конторы, консалтинговые фирмы, семейные предприятия и т.п. В название товарищества включается фамилия одного или нескольких партнеров, например: Wilson & Sons; Smith, Johnson & Brown. Если в названии товарищества имеется имя собственное без каких-либо других званий (Dr, Sir и т.п.), то при обращении в такую фирму (в письме, факсе) перед ее названием в адресе ставится слово messrs (сокр. от messieursгоспода), например:

Messrs Smith & White

260 London Road Nottingham NG76JF England.

2.Fill in the list of advantages and disadvantages of partnerships:

Advantages:	Disadvantages:
a) ....................	a) ................................
b) ....................	b) ................................
c) ....................	c) Potential for extreme
	competition among partners
d) ....................	d) ……………………
e) ....................
f) ....................
g) Possible unlimited life span

3.Discuss advantages and disadvantages of partnerships over sole

proprietorships. Use the following cliche:

1) On the one hand ... on the other hand ...

2) Although ...

3) I think ...

4) As far as I can judge ...

5) It is common knowledge that ...

6) etc.

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SECTION 4. CORPORATIONS

		A
	1. Words and expressions to be memorized:
	property	- собственность
	holding	- вклад; pl. вклады
	stock	- акция; акционерный капитал syn. share
	purchase	- n. покупка
		- v. покупать, приобретать
	public corporation	- корпорация открытого типа,
		открытая корпорация
	private corporation	- корпорация закрытого типа,
	S corporation	закрытая корпорация
		- малая корпорация
	(or small corporation)
	non-profit corporation	- некоммерческая корпорация
	subsidiary corporation	- дочерняя корпорация
	parent company	- компанияучредитель, материнская
		компания
	holding company	- компания, владеющая контрольным
		пакетом акций других компаний;
		компания-держатель; холдинговая
		компания

2. Read the text:

Corporations. Types of Corporations.

In the United States, a corporation is a specific legal form of organization of persons and resources chartered by one of the 50 states for the purpose of conducting business. When people and resources are brought together to form a corporation, the result – in the eyes of the law – is a person (Indeed, the Latin word “corpus” means “body” or “person”). So, a corporation is authorized by law to act as a private person. A U.S. corporation, distinct from any individual human being, may own property, sue or be sued in court and make contracts. For this reason, a corporation is an ideal vehicle for the conduct of business by many smaller enterprises as well as larger ones, it is the most significant form of business ownership in terms of money, size, and power. Corporations account for 72 percent of all money taken in

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by U.S. business firms. This form of organization has five important characteristics:

-It’s an artificial person with specific legal standing;

-It has limited liability;

-The state gives it the power to conduct a specific type of business activity;

-It is owned by shareholders;

-Shareholders are liable for damages only to the extent of their holdings.

A corporation whose stock is owned by large numbers of public

investors is called a public corporation. The stock of these firms can be purchased on the open market by anyone.

Conversely, private corporations do not sell stock publicly.

If shares of a corporation are owned by less than 500 people or the company has under $ 1 million in assets, the firm is not required to publicly disclose its finances unless its stock is traded on a national exchange.

Other types of corporations include : (1) the S corporation, which is permitted to have a maximum of 35 shareholders and may be taxed like a partnership; (2) the non-profit corporation, such as the Public Broadcasting System (PBS); (3) the subsidiary corporation, which is entirely or partly owned by another corporation called a parent company; and (4) the holding company, which is a type of parent company that provides little control over the subsidiary and merely holds its stock as an investment.

3.Answer the questions on the text:

1.What is a corporation?

2.Does a corporation have the same standing, rights and duties as an individual?

3.What percent of all money taken in by businesses do corporations account for?

4.Who is a corporation owned by?

5.Does a corporation have limited or unlimited liability?

6.To what extent are shareholders liable for damages?

7.What is a public corporation?

8.What do private corporations differ from public ones?

9.Do all corporations have to report their financial condition to the public?

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10.How many shareholders is the S corporation permitted to have and how is it taxed?

11.Are all corporations profit-making organizations? 12.What’s the name of the corporation which owns another?

13.How is the corporation whose stock is owned entirely or partly by another corporation called ?

14.Does the holding company provide much control over the subsidiary?

1.Match each type of organization on the left with its description on the right:

	Type	Description
1.	Public corporation	a. an organization that
	makes	no profit
2.	Private corporation	b. a company which owns
	another
3.	S corporation	c. a corporation whose
	shares are	not publicly available
4.	Non-profit corporation	d. a parent company which
	does	not actively participate in the
		management of the company
		it owns
5.	Subsidiary corporation	e. a corporation whose
	shares are	publicly available
6.	Parent company	f. a company with a number
	of	shareholders not more than 35
7.	Holding company	g. a firm owned by a parent
	company

5. Cover the Type column, and from the description name the type of organization. Finally, cover the Description column, and try to describe each organization listed.

B

1. Words and expressions to be memorized: insurance - страхование

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institutional investor	- инвестор-учреждение
voting shares	- акции с правом на большее число голосов
	при голосовании
accountant	- квалифицированный бухгалтер
proxy	- передача голоса или полномочий
by proxy	- по доверенности
officer	- должностное лицо
chief executive officer (CEO) – главный исполнительный
	директор компании
lending institution	- кредитное учреждение, кредитная
	организация
block of stocks	- пакет акций

2. Read the following international words and give their Russian equivalents:

separation; director; person; percent; detail; effective; theory; recommendation; typically; role; act v.; select; prestige; reality; president; vice president; aspect; report v.; meeting; audit v.; normally; pension; fund; plan.

3. Read the text:

Separation of Ownership and Control

In a corporation, ownership and management are separate and the shareholders or owners of the company’s stock can vote to oust managers.

Although in theory shareholders are the ultimate governing body in a corporation, in reality they most often accept the recommendations of management. Furthermore, not all corporate stock carries voting rights. In the past 20 years, institutional investors such as pension funds and insurance companies have become quite influential because they own large numbers of shares. Such investors want the value of the stocks they hold to increase, and they have begun to play a greater role in governing the corporations they invest in.

At least once a year, all owners of voting shares are invited to a meeting to choose directors for the company, select an independent accountant to audit the firm, and attend to other business.

Until recent years only a few people would normally attend the annual corporation meetings. Most shareholders would vote on the

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election of directors and certain other highly important matters by “proxy”, that is by filling out a form and mailing it in authorizing management to vote on their behalf. Now, it is not unusual for several hundred to attend. Often they ask management penetrating questions.

The board of directors, which represents shareholders, has the job of guiding the corporation’s affairs. Typically, the board consists of 15 to 25 directors who vote on major management decisions.

The makeup and role of the board of directors varies from one company to another. In some corporations, the board of directors merely acts as a “rubber stamp” in approving management’s recommendations; in other firms, they make major policy decisions. Inсreasingly, only a minority of board members are internal officers of the corporation. Some directors are selected to give prestige to the board, others to provide certain skills or to represent lending institutions. It is not unusual for the same person to serve concurrently on several different corporate boards. The board meets monthly or quarterly to consider policy related to operational decisions and to review accomplishments. At annual meetings new directors are added as needed and major policy decisions are made.

The real power in a corporation usually rests with its chief executive officer (CEO), who is responsible for setting down the policies of the company under the direction of the board. The CEO typically appoints the other major corporate officers, who must also be approved by the board. They manage various aspects of the corporation and report to the CEO. The CEO may also serve as the chairman of the board, the president of the corporation or both. As long as the CEO has the confidence of the board of directors, he or she is permitted a great deal of freedom in the operation of the company.

Employees are increasingly becoming involved in governing the firms that employ them. One form of employee involvement is the employee stock ownership plan (ESOP), which encourages workers to buy shares of stock in the companies they work for. Since such plans often control large blocks of stock, workers receive a voice at shareholder meetings and may even be represented on a firm’s board of directors.

4.Answer the following questions on the text:

5.Are ownership and management separate in a corporation?

6.Can the shareholders vote to oust managers?

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7.Are shareholders the ultimate governing body in a corporation theoretically or in practice?

8.Does all corporate stock carry voting rights?

9.Why have institutional investors begun to play a greater role

in governing the corporations they invest in? 10. Who is the board of directors elected by? 11. What does it mean to vote by proxy?

12. What body has the job of guiding the corporation’s affairs? 13. How many directors does the board usually consist of? 10.How often does the board meet?

11.Do internal officers of the corporation represent a majority of board members?

12.Who does the real power in a corporation rest with? 13.Can the chief executive officer also be the chairman of the

board?

14.What is one form of employee involvement in governing the firms that employ them?

15.What does ESOP encourage workers to do?

1. Find out which definition on the right matches which word on the

left:
1. employ	a. a person who is employed
2. employee	b. use a person as a paid worker
3. employer	c. a person that employes others

2. For each word or expression in A find the one in B, which has the same meaning:

A.

1. to oust; 2. to attend to; 3. to accept; 4. matter; 5. to mail; 6. major; 7. to vary;8. to approve; 9. minority; 10.quarterly; 11. to rest with smb; 12. confidence;13. value; 14. encourage; 15. to govern; 16. concurrently; 17. annually.

B.

a) to be different; b) the smaller part; c) to post; d) to cause to leave; e) cost; f) to guide; g) to receive; h) to stimulate; i) to pay attention to; j) once a year; k) chief; l) to agree; m) at the same time; n) to be the responsibility of smb; o) affair; p) trust; q) every three months.