Unit 11. Setting Up a Business.

1. FORMS OF PROPRIETORSHIP. Key vocabulary. (SB page 106)

Many large businesses in the UK are public limited companies (plc), which means that the public can buy and sell shares on the stock exchange. Examples include Marks & Spencer, British Telecom and the National Westminster Bank. The minimum share capital for the public limited company is £50 000, so many new businesses are likely to take one of the following forms:

Sole Trader or Sole Proprietor – The simplest way of starting a business, usually owned by a family. You are self-employed and have unlimited liability for all aspects of finance and management of your business.

Partnership– The partners can contribute tangible capital (money, building, machinery) or intangible assets ( famous name, intellect, etc.) All partners are responsible for the debts of the partnership. Profits and losses are shared.

Private Limited Company (Ltd) – a company can be formed with a minimum of two people becoming its shareholders. They must appoint a director and a company secretary. If the company goes out of business, the responsibility of each shareholder is limited to the amount they have contributed; they have limited liability.

In the US businesses have the same basic forms. In order to have the right to issue and sell stock, the corporation is to be registered by the authorities. Legally the owners of the corporation are stockholders who offer the shared capital. The final authority belongs to the Annual Meeting of Stockholders. The corporation is managed by the Board of Directors. The members of BD are elected by the AM. The president of the company is appointed by the BD.

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Tangible capital, tangible assets: Материально- ощутимые активы (напр. Наличные средства, земля, строения), в отличие от нематериальных активов (intangible assets), которые являются физически неощутимыми (напр. патенты, торговые марки или “гудвил” (goodwill) – репутация фирмы).

To what forms of proprietorship do these Russian abbreviations belong? ТОО / OOO / AO

2. ENTREPRENEURSHIP. Complete the passage with the following words: SB Ex3 page 110.

• entrepreneurs • ventures • industry •demand

• advantage • founded • predicts

Andrew Klein, the director of Spring Brewing Company (1) founded his company in 1993 with the idea of bringing a Belgian beer, Wit Beer, to the American market. However, his original approach to finding the necessary capital, by using the Internet, soon made him a pioneer in this new field. He was one of the first to understand the (2) _____________ of using the Internet as a means to attract investment capital for new business (3) _____________. For just $200 a month, Klein was able to rent a site, present his products and contact investors all over the world. Following in his footsteps, many other (4) ___________________ have been able to finance and promote their own businesses in a similar way.

Today, Wit Beer can be found in several major cities in the US and Andrew Klein (5) ___________ that consumer (6) ___________ for his company products will continue to rise. Indeed Wit Beer already outsells some more exotic beers, which compete in the (7) ______________.

3. ROLE - PLAY. (SB ex 1 page 115)

PRESENTATION of A BUSINESS PLAN: Turn the page for instructions

Business plan is a written report that states what a company aims to do to increase sales, develop new products, etc. within a certain period, and how it will obtain the necessary finances and resources.

Work in small groups. You have decided to set up your own business together and have approached the bank for a loan. They have asked you to prepare a business plan. Decide what type of business you are going to set up, then discuss each of the points listed in the business plan. Make a presentation of your business plan, each person reporting a few points of the plan.

Use the following presentation as a model.