Advantages of a Corporation:

• Limited liability is one of the major advantages of a corporation. Shareholders are not liable for the debts of a company they own shares in. If a business fails shareholders can lose no more than he or she has paid for the shares of stock but their personal assets – car, home, and personal bank accounts – are safe from the creditors of the business.

• Being a separate legal entity, the corporation actually owns and operates the business for the benefit of the shareholders, but under their total control.

• Shares of ownership are transferable. Stockholders can enter or leave a corporation at will simply by buying or selling shares of stock.

• Corporation has unlimited life. The corporation’s power of succession enables it to have a continuous existence. Unlike a sole proprietorship, the death of the corporate stockholders will not terminate the corporation, since their shares are passed on to their heirs.

• It is much easier for a corporation to increase capital to manage and expand its operations. To raise additional funds corporation attracts new stockholders by selling its new issues of shares to the public.

Disadvantages of a Corporation

• A corporation is difficult and expensive to create and organize. This process requires higher start-up capital and the services of a lawyer to obtain a government charter.

• Corporation is subject to double taxation. As a legal entity it pays a corporate income tax. Then, if the corporation distributes some of its net income to the stockholders as dividends, they are taxed again on the stockholders’ individual income tax returns.

The shareholders do not directly manage the corporation's daily operations. Instead, the shareholders meet at a corporation’s annual meeting to elect a board of directors whose job is to make general business decisions. Their decisions are then implemented by the corporation's officers, who are appointed by the directors.

Exercise 1. Read, translate into Ukrainian in written form and memorize the definitions of the following economic terms and concepts.

Board of directors: elected representatives of corporate stockholders.	_____________________________________ _____________________________________
Corporation: a business organization created under a government charter.	_____________________________________ _____________________________________
Dividends: payments made from the earnings of a corporation to its stockholders.	_____________________________________ _____________________________________
Liability: any claim on, or debt of, a business or individual.	_____________________________________ _____________________________________
Limited liability: an advantage of a corporation allowing a stockholder no legal responsibility for the debts beyond the sum he or she has invested in the corporation.	_____________________________________ _____________________________________ _____________________________________ _____________________________________ ____________________________________
Partnership: an unincorporated business organization owned by two or more persons.	_____________________________________ _____________________________________ ____________________________________
Sole proprietorship: a business that is owned by one person.	_____________________________________ _____________________________________
Stock: a share in the ownership in a corporation.	_____________________________________ _____________________________________
Stockholder: an owner of stock in a corporation	_____________________________________ _____________________________________
Unlimited liability: a requirement that the owner or owners assume full responsibility for all losses or debts of a business.	_____________________________________ _____________________________________ _____________________________________ _____________________________________

Exercise 2. Give the Ukrainian equivalents for the following.

a key factor to success of any business organization	_____________________________________ _____________________________________
a sole proprietor
all the obligations of the business
to assume the burden of any losses or liabilities	_____________________________________ _____________________________________
the owner’s personal financial resources	_____________________________________ _____________________________________
to operate it for profit
to benefit a partnership by his/her knowledge	_____________________________________
their portion of earnings
to pay off all the business’s debts
to put great efforts into the management	_____________________________________ _____________________________________
a new partnership agreement must be drawn up	_____________________________________ _____________________________________
its legal independence
not to be liable for the debts of a company	_____________________________________ _____________________________________
to enter or leave a corporation at will
the corporation’s power of succession
to obtain a government charter
to be subject to double taxation
to elect a board of directors

Exercise 3. Find the English equivalents for the following words and phrases from the text.

організаційна форма бізнесу організація бізнесу;	_____________________________________ _____________________________________
брати до уваги
підприємство, що знаходиться у приватній власностідприємицтва	_____________________________________ _____________________________________
найменш дорога та найпростіша для того щоб засновувати та керувати форма підприємництва	_____________________________________ _____________________________________ ____________________________________
будь-який прибуток отриманий від підприємства/компанії	_____________________________________ _____________________________________
особисте майно
діяти як співвласники
особливий податковий режим
участь у прибутках
спричиняти конфлікти в управлінні
вихід або смерть партнера
як окрема юридична особа
власність корпорації
підприємство банкрутує
мати тривале існування
більший початковий капітал
свій чистий прибуток
щоденна/повсякденна діяльність корпорації

Exercise 4. Match these nouns/noun phrases and nouns/noun phrases as they occur together in the text: translate the expressions they make into Ukrainian.

the amount		tax return
a form		agreement
a partnership		capital
the disagreements	from	one’s bank account
a level	between	business organization
the money	of	control
an income		the partners
the corporation’s power		succession

Exercise 5. Match these verbs, prepositions and nouns/noun phrases as they occur together in the text: translate the expressions they make into Ukrainian.

to set		a corporate income tax
to be entitled		its business activity
to be free to make		additional funds
to state		all the profits
to specialize	for	any business decision
to excite	to	certain activities of the business
to harm	up	a privately owned enterprise
to pay	on to	higher start-up capital
to pass	in	controversy
to raise		the shares of stock
to require		the terms of the partnership
to pay		their heirs

Exercise 6. Copy out from the texts the sentences containing the following words and word-combinations and translate these sentences into Ukrainian.

expected profits or losses of the business: _______________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

the owner pays: ____________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

can be taken to pay: ________________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

the terms of the partnership: __________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

are likely to harm: __________________________________________________________

___________________________________________________________________________________________________________________________________________________________________________________________________________________________

a business that is authorized by law: ___________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

but under their total control: __________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

additional funds: ___________________________________________________________

___________________________________________________________________________________________________________________________________________________________________________________________________________________________

they are taxed again: _______________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Exercise 7. Find in the box the English equivalents to the words listed below. More than one is possible.

акція (3)
брати до уваги (2)
відповідальний (2)
відповідальність (2)
діяльність (2)
єдиноосібний власник (2)
заради когось (3)
засновувати підприємство (3)
керувати підприємством (3)
кредитоспроможність (2)
надходження (2)
підприємство (3)
припиняти діяти (2)
розподіляти (2)
суперечка (3)
the stock	to bear in mind		a share		a sole trader		an enterprise
responsible	for the benefit of		liable		proceeds		to distribute
liability	to start a business		to share		operation		a controversy
activity	to manage a business		a conflict		receipts		responsibility
a business	one’s ability to borrow				to establish a business
to terminate	a sole proprietor		to end		in behalf of		a company
to take into consideration		for one’s benefit				to run a business
borrowing power		to operate a business				a disagreement
to launch a business						a share of stock

Exercise 8. Pair the halves of the sentences and write the completed sentences. Translate them into Ukrainian.

If a sole proprietorship fails the creditors have the right	his or her personal assets and liabilities.
The more partners there are,	manage daily business policies.
At will, a sole proprietor may expand operations or contract them,	the amount of investment in the corporation and no more.
There is no distinction between the sole proprietor’s business assets and liabilities and	the management of the business, business's debts and liabilities.
The business failure or death of a partner	the primary advantages of partnership.
All of the partners are equally responsible for	the more start-up capital they can put into the business.
The stockholders elect a board of directors to make the major business decisions and	to start and achieve success through their individual efforts.
A stockholder's personal liability is limited to	two separate legal entities.
A corporation and its shareholders are	sell his or her business or liquidate it.
Sole proprietorships are the easiest form of businesses for people	usually leads to the end of the partnership.
The availability of more financial resources and ease of shared management are	to recover the total amount of the debt by selling off the owner's assets.

____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ___________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________

___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Exercise 9. At least one word or word-combination has been omitted from each of these sentences. Rewrite the sentences filling in the blanks from the list of missing words below and translate them into Ukrainian.

1. What distinguishes __________________________ from other forms of business organizations is that one person owns the firm and he is free to make _________________ _____________.

_____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

2. All the profits of a sole proprietor are reported on _________________ and taxed as _____________________________.

___________________________________________________________________________________________________________________________________________________________________________________________________________________________3. Most corporations ___________ imposed on their income, and corporate shareholders, in turn, pay taxes on ____________ ______________________ that they receive as dividends.

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________4. A partnership is an enterprise established and owned by more than one person who ______________________________ to manage the firm.

___________________________________________________________________________________________________________________________________________________________________________________________________________________________5. By selling its stock, a corporation ___________________________ needed to establish the business and ________________________.

___________________________________________________________________________________________________________________________________________________________________________________________________________________________6. Liability refers to legal responsibilities _____________________ of a business.

__________________________________________________________________________________________________________________________________________________7. Shares of stock issued and sold by the corporation represent ________________________________________.

___________________________________________________________________________________________________________________________________________________________________________________________________________________________8. In general, the partnership shares the same _________________________________ as the sole proprietorship.

___________________________________________________________________________________________________________________________________________________________________________________________________________________________9. A sole trader often ________________________ in raising funds and is limited by the personal financial resources and his or her _____________________.

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________10. ______________________ of a sole proprietorship depends on the borrowing power of the owner and his abilities ______________________.

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________11. A partnership is ____________ between two or more persons to combine their assets, knowledge and skills to manage a business _______________.

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________12. Because __________________ in a large corporation is separated from those who own it, the death of one or more owners does not cause a __________________________.

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

ability to borrow	management		raises the capital		a corporation’s failure
suffers difficulties	the tax return		pay taxes		a sole proprietorship
to pay for debts	for profit		success or failure		to finance its growth
have equal rights and powers			an agreement		to operate a business
whatever changes he wishes		the owner’s personal income				the ownership of a corporation
the share of the corporation's income				advantages and disadvantages

Exercise 10. Match each term in column A with its definition in column B.

Corporation	A business organization in which owners share the profits and are jointly responsible for any losses.
Dividend	If the company goes into liquidation because of debts, each stockholder has to pay his full share of the debts of the company.
Liability	A group of people authorized by law to act as one person and have liability separate from its owners
Limited liability	A form of business organization in which the assets and liabilities of the firm are the owner's assets and liabilities without limit.
Partnership	A part of a corporation's profits which is divided among the stockholders.
Sole proprietorship	If the company goes into liquidation because of debts, each stockholder may have to lose the cost of his or her shares of stock.
Unlimited liability	The legal obligation to make some payment or to pay debts

Exercise 11. Translate into English using the active vocabulary.

Усі форми організації бізнесу створюються і існують, щоб отримувати прибуток.	_______________________________________ _______________________________________
Одноосібний власник особисто і повністю відповідальний за усі заходи, які він вживає заради свого підприємства.	_______________________________________ _______________________________________ _______________________________________
Як одноосібна власність, так і партнерство - це організаційні форми бізнесу з необмеженою відповідальністю.	_____________________________________ _______________________________________ _______________________________________
Партнерська угода складається кожного разу, коли один з партнерів залишає справу.	_______________________________________ _______________________________________
І одноосібна власність, і партнерство не є юридичними особами.	_______________________________________ _______________________________________
Партнерська угода складається, щоб обмежити відповідальність кожного партнера та уникнути конфліктів керування.	_______________________________________ _______________________________________ _______________________________________ _______________________________________
На відміну від корпорації, яка існує незалежно від своїх власників, існування партнерств залежить від їх власників.	_______________________________________ _______________________________________ ______________________________________
Кожний партнер відповідаль-ний за щоденну діяльність, вкладаючи свої зусилля, знання та уміння у розвиток підприємства.	_______________________________________ _______________________________________ _______________________________________
Корпорації можуть продавати свої нові випуски акцій громадськості, щоб збільшити фінансові ресурси.	_______________________________________ _______________________________________ _______________________________________
Корпорація – це організаційна форма бізнесу, яка створюється за дозволом уряду.	_______________________________________ _______________________________________
Акціонери як власники корпорації мають обмежену відповідальність.	_______________________________________ _______________________________________
Обмежена відповідальність означає, що якщо корпорація припиняє діяльність або банкрутує, акціонери можуть втратити лише те, що вони заплатили за свої акції.	_______________________________________ _______________________________________ _______________________________________ _______________________________________ _______________________________________ _______________________________________
Акціонери мають право на частину чистого прибутку корпорації, розподіленого їм у вигляді дивідендів.	_______________________________________ _______________________________________ _______________________________________ _______________________________________

Exercise 12. Answer the following question.

1. What must be taken into consideration before starting a business organization? 2. What are three different ways that a business can be privately owned? 3. What is a sole proprietorship? 4. What are the advantages of this form of business organization? 5. What are the disadvantages of a sole proprietorship? 6. What is a sole proprietor responsible for? 7. What does preferential tax treatment mean? 8. What does unlimited liability mean? 9. What is a partnership? 10. What does a partnership agreement state? 11. What are the advantages of a partnership? 12. Are there any advantages of a partnership over a sole proprietorship? What are they? 13. What are the disadvantages of a partnership? 14. Why can management conflicts occur? 15. What is a corporation? 16. What is the essential feature of a corporation? 17. Who owns a corporation? 18. What are the major advantages of a corporation? 19. What is limited liability? 20. What is the advantage of limited liability? 21. What liability do the shareholders have? 22. Who can become a shareholder? 23. Why does a corporation have a continuous existence? 24. Why is it much easier for a corporation to increase additional capital? 25. What are the major disadvantages of a corporation? 26. What does the process of creating a corporation require? 27. What does double taxation refer to? 28. What are dividends? 29. What is the role of the board of directors?