1. For some people owning their own business has been a lifelong dream....
2. While each business is different, there are some basic things every small business needs to
succeed...
3. A sole proprietorship is the easiest form of business to organize...
4. A sole proprietorship is the oldest and the most common form of ownership...
5. A sole proprietorship can be dissolved as easily as it can be started...
6. The financial condition of the firm is the same as the financial condition of the owner...
Ex. 14. Say if these sentences are true or false. Correct the false ones.
1. Almost all people are ready to start their own business because they are self-confident and
are not afraid to fail.
2. You dont need to have a good idea, any knowledge, experience, or common sense to start
your own business.
3. A sole proprietorship is the easiest form of business to organize.
4. The organization costs for obtaining registration and municipal licenses are very high.
5. A sole proprietor has absolute control over the use of the companys resources.
6. A sole proprietorship is a contractual relationship between two or more persons carrying on a
joint business.
7. A proprietorship has an unlimited life, it cant be terminated under any circumstances.
Ex. 15. Match the questions to their answers below.
1. Why do many people hesitate to start their own business?
2. What are the basic things every small business needs to succeed?
3. Why does the owner have absolute control over the use of the companys resources?
4. How is a sole proprietorship also referred to?
5. What are the three traditional forms of business?
6. What happens if the assets of the firm cannot cover all the liabilities?
7. In what cases can sole proprietorship terminate?
8. What are legal requirements for starting a business?
9. Why the owner is legally liable for all debts of the company?
10. Why a sole proprietorship may have difficulty in obtaining capital?
A. They are the sole proprietorship, the partnership, and the corporation.
B. Because the financial condition of the firm is the same as the financial condition of the owner.
C. As single proprietorship, individual proprietorship, individual enterprise, and the one-person
business.
D. Because they dont think they have enough education, experience or money.
E. On the death of the owner, when a creditor files for bankruptcy, or when the owner ceases
doing business.
F. Because lenders areleery of giving money to only one person whois pledged to repay.
G. The sole proprietor must pay these debts from his own pocket.
H. They are a good idea, hard work, knowledge combined with common sense and imagination,
plus the willingness and determination to make an idea into reality.
I. They are a municipal license and a registration license.
J. Because there are no others to consult.
Text 5
|
|
|
PARTNERSHIP
VOCABULARY
to specify
initial investment -
the means of sharing profits or losses
limited partnership - ; ()
general (unlimited) partnership ()
joint ventures
silent partner
entity - ,
which often give much cause for disagreement
trading risks
A partnership is a business owned by two or more persons associated as partners. Partnerships are created by an agreement, oral or written, which expresses the rights and obligations of each partner. Partners interests can be protected by an Agreement of Partnership that specifies all the details of the partnership. The partnership agreement includes such terms as the initial investment of each partner, the duties of each partner, the means of sharing profits or losses between the partners each year.
There are three types of partnerships: general (unlimited) partnerships, limited partnerships, and joint ventures. When the owners of the partnership have unlimited liability they are called general partners. If partners have limited liability they are limited partners. There may be a silent partner as well a person who is known to the public as a member of the firm but without authority in management. The most common form is the general partnership, often used by lawyers, doctors, dentists, and accountants. Limited partnerships are a common form of ownership in real estate, oil prospecting, etc.
The advantages of this type of a firm are similar to those of the one-man business. It is a flexible organization in which partners usually specialize in one or more aspects of the business; one may be responsible for buying, one for selling, one for production, and so on. Partnerships, like sole proprietorships are easy to start up. Partnerships are a stronger entity and can attract new employees more easily than proprietorships. It is also easier for partnerships to raise additional capital. Creditors are more willing to lend money to partnerships than to proprietorships because all of the partners are subject to unlimited financial liability.
The great disadvantage, like that of the one-man business, is the fact that the liability of the partners is unlimited and partners together are legally liable for all the debts of the firm. If one of the partners cannot cover his or her share of the debts the other partners must pay all debts.
Partnerships are not as easy to dissolve as sole proprietorships. The survival of a partnership depends upon the relationship between a number of people in situations which often give much cause for disagreement. Thus, when trading risks are very great, the partnership is not very stable type of organization.
