Comprehension

1. Agree or disagree with the statements.

1. Service companies include companies such as accounting firms, law firms, repair shops and others.

2. Merchandising companies buy materials, convert them into prod­ucts.

3. The owners of the partnership are called shareholders or stockholders.

4. Single proprietors are responsible for all debts of the business.

5. Partnerships are created by an agreement.

6. Corporations have the advantage of unlimited life and limited liability.

7. A partnership is the easiest way to get started in a business activity.

8. The stockholders directly manage the corporation.

Vocabulary

2. Find the equivalents in the text.

Торговая компания; предприятие; компания, занимающаяся предоставлением услуг; автодилеры; индивидуальное предпринимательство; собственник несет ответственность; товарищество; корпорация; акции; избирать совет директоров; недостаток; двойное налогообложение доходов; платить налоги.

3. Match the words from column a with the words from column b to make a phrase.

A	B
1) to pay	a) debts
2) to elect	b) a firm
3) to be responsible for	c) the interests
4) to be ready	d) the amount of money
5) to own	e) a service
6) to receive	f) for sale
7) to represent	g) a board of directors
8) to manage	h) the income
9) to lose	i) taxes
10) to perform	j) a company

4. Choose the correct item.

1. Service companies perform services for … .

a) a fee

b) free

2. Merchandising companies purchase goods that are … .

a) ready to sale

b) ready to produce

3. Manufacturing companies … products.

a) buy

b) make

4. A sole proprietorship is business owned by … .

a) an individual

b) two or more people

5. Partnerships are created by … .

a) an order

b) an agreement.

6. The owners of the corporation are called … .

a) managers

b) shareholders.

5. Write down advantages and disadvantages of each form of business. Use some characteristics listed below.

	advantages	disadvantages
a sole trader
a partnership
a corporation

1. The owner can always be the boss.

2. Can continue operations indefinitely.

3. Lack of opportunities for employees as the firms are small.

4. Limited liability.

5. Easiest kind of business to organize.

6. Unlimited liability.

7. The death of the owner can result in the termination of the business.

8. Double taxation.

9. It can grow to be very large.

10. Management is often separated from ownership.

6. Fill in the correct words from the list below. Before doing the exercise study the following material.

Articles of Association states the rights and duties of all of the directors, the rules concerning the election of directors and the procedure to be followed for the issue of shares.

Memorandum of Association – the document which contains the name of the company and its registered address (registered office). It also states the objectives of the company and the amount of share capital that the directors intend to raise.

Article of Association, Certificate of Incorporation, Certificate of Trading, legal,

limited liability, Memorandum of Association, plc, private, Prospectus, Registrar of Companies, Stock Exchange

Public Limited Company

A Public Limited Company has … at the end of its name, distinguishing it from a … limited company. The shares of most public limited companies are bought and sold through the … . The shareholders have … and can be held responsible only for payments up to the value of their shares. Like the private limited company, public company has its own … status separate from the shareholders. The procedure for setting up a public limited company starts with submitting … , document stating the company’s name and address of the company along with the … giving details about how the company will be run. The … will issue a … . After this the company can issue a … - an advertisement inviting the public to buy shares in the company. When the shares have been issued the Registrar of Companies will draw up a … ; this allows the company to start trading.