IV. Corporation

1.Working in groups try to give the definition to the word corporation. Use the words below.

to rule to get profit stock holder

to issue stock certificates

to attract financial recourses to invest capital in plants, research

1. Read the text and check if your definitions were correct.

Corporation

A business corporation is an institution established for the purpose of making profit. It is operated by the individuals. Their shares of ownership are represented by stock certificates. A person who owns stock certificates is called a stockholder.

There are several advantages of the corporate form of ownership. The first is the ability to attract the financial recourses. The next advantage is the corporation attracts the large amount of capital. It can invest it in plants, equipment, research. And the third advantage is that the corporation can offer higher salaries and thus attract talented managers and specialists.

The privately owned business corporation is one type of corporation. There are some other types too. Educational, religious, charitable institutions can also incorporate. Usually such corporation does not issue stock and is non-profit. If there is a profit it is reinvested in the institution rather than distributed to private stockholders.

In some western countries, cities, stales, federal government and special agencies can establish governmental corporations. A few examples of the governmental corporations are state universities, state hospitals and city owned utilities. Governmental corporations are non-profit as a rule and usually they do not issue stock certificates.

1. Active vocabulary

corporation

stock certificate

to attract financial resources

to attract a large amount of capital

non-profit

educational, religious, charitable institutions

to establish

stockholder (shareholder)

to offer high salaries

to issue stock

to reinvest

ADDITIONAL VOCABULARY

to need some legal advice

to expand

to apply for a corporate charter

to hold a meeting

to choose the companies officers

to have a final authority

to supervise daily management

to incorporate

to follow the legal procedure

in exchange for investment capital

to elect a board of director

bylaws

EXERCISES ON THE VOCABULARY

1. Choose the necessary word and put it in the sentence.

a) What kind of … is better: buying stock or buying real estate? b) To attract the greater financial … the company issues the stocks. c) The university can be … corporation. d) The partners didn’t put the same … into business . e) The group of people from different countries are going to … a corporation. f) The Red Cross is an international … organization.

charitable stock recourses investment to establish non-profit

2. Make up as many as it is possible the combinations of the words:

stock certificate

institution for–, non–

profit religious

to attract a large amount of capital

to issue

charitable

financial resources

holder

educational

2. How do you understand the words? Try to explain them in English.

Stock holder Stock certificate

Charitable institution Salary

Non-profit Specialist

4. Translate the Russian words to complete the sentences.

1. Aкция is a certificate of corporation.

2. The stockholders usually hold ежегодное собрание they always have решающее слово.

3. In spite of the административные исполнители of the company осуществляют daily управление, the stockholder голосуют at the annual meetings.

4. Their business is doing very well that is why they are going to расширить it.

5. Совет директоров выбирает the company’s officers.

6. The owner of the corporation should проводить the Board of Directors and adopt the юридические положения для предприятий.

5. Translate from the Russian into the English:

1. Корпорация может выпускать и продавать акции.

2. Корпорация предлагает более высокую заработную плату.

3. Корпорация имеет больше возможностей для вовлечения финансовых ресурсов, чем партнёрство.

4. Каждый год акционеры проводят собрание.

5. Образовательные, религиозные учреждения могут быть корпорациями. Подобные учреждения, как правило, не приносят прибыль.

6. Эта корпорация прибыльна, она будет расширяться.

7. Сначала вы должны подать заявление на корпоративный патент.

8. Акционеры имеют решающее слово в управлении корпорацией.

9. Административные исполнители компании осуществляют постоянное руководство.

10. Владельцы акций проводят ежегодное собрание и выбирают совет директоров.

11. Корпорация имеет право возбуждать уголовное дело.

12. Акционер – это человек, которому принадлежат акции корпорации.

13. Корпорация имеет возможность привлекать большие финансовые ресурсы и, поэтому она может предложить своим сотрудникам высокое жалование.

n) Государственная корпорация – это некоммерческая корпорация, которая не выпускает акции.

o) Корпорация управляется советом директоров.

p) Целью благотворительных корпорации не является получение прибыли.

EXERCISES ON THE TEXT

1. Answer the questions using the information from the text.

1) What does the corporation mean?

2) Is the corporation larger then sole proprietorship/partnership? Why?

3) Does corporation have limited liability?

4) What should you do at first to form a corporation?

5) Who supervises daily management in a corporation?

3. Make up the diagram “types of corporation” and represent it.

3. a) Fill in the table:

The points of comparison	corporation	sole proprietorship	partnership
1. number of owners 2. tax benefits 3. type of liability 4. the process of establishing 5. the volume of profits

What kind of a corporation do you prefer? Explain why.

4. Work in pairs and make up the dialogues:

a) You are going to form a corporation. Ask a lawyer how to organize it.

b) You are two friends. You both run your own business. But one of you has a sole proprietor ship and other has a corporate form of business. Try to prove each other that your kind of business is more advantageous.

c) You are two partners and you are thinking of incorporating. Discuss the advantages and disadvantages of corporation.

5. Project (work in groups). Divide into 4 groups and make the presentation of your corporation. For the help use the following questions:

1) Give the name to your corporation.

2) What does your corporation deal with?

3) What of corporation do you have and why?

4) What troubles are you going to meet establishing the corporation?

5) Is your business profitable?

6. Complete the puzzle.

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 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 a share is its … value.

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

9. One of the owners of the 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 … .

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 or 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).

		1		2								3
		C		P								M
	4		5							6
	I		P							T
														8
								7	F					A
								10
9	S							L
													12
					13	11	B						P
	14		15		C
	P		F
16	L
											17	D
		18	S