1. _____________________________________
2. ___________________________________________
3. _____________________________________________
4. ______________________________
5. ________________________________________________
6. _____________________
Ex. 17. Answer the questions:
1. What is the main characteristic of a partnership?
2. In what way are partnerships created?
3. How can the partners interests be protected?
4. What kind of document is the Agreements of Partnership?
5. How many types of partnerships do you know?
6. Which form of partnerships is more common?
7. What are the advantages of partnerships?
8. Is it easier or more difficult to obtain additional capital? Why?
9. What can be named as the major disadvantage of a partnership?
10. What does the survival of a partnership depend on?
Text 6
CORPORATION
shares of ownership
stock certificate
shareholder / stockholder
limited liability
private limited company - ;
public limited company - ,
general public
Stock Exchange - ,
market value ,
expiry of the charter -,
provincial government
Acorporation is a business owned by a few persons or by thousands of persons. A business corporation is an institution established for the purpose of making profit. The shares of ownership of the members of the corporation are represented by stock certificates. A person who owns a stock certificate is called a shareholder or a stockholder. The stockholders do not directly manage the corporation; they elect a board of directors to represent their interests. The board of directors selects the president and vice president, who manage the corporation for the stockholders.
The key factor in owning any company is the guarantee called limited liability: the owners of a company never have to pay more than they have invested in the company. Their liabilities are limited. When a company goes bankrupt, the owner can never be required to pay its unpaid bills. That is why corporations are also referred to as limited companies. A limited company may be private or public. Many countries make a clear distinction between public and private companies. If it is a private limited company, a shareholder can only sell shares if all the other shareholders agree. In some countries, a large company is said to be privately owned if its shares are not available to the general public. If it is a public limited company, shares can be bought and sold freely, usually at Stock Exchange. The price you pay at the Stock Exchange (or to a shareholder) for your shares is their market value.
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There are several advantages of the corporate form of ownership.
Limited companies are less risky from an owners point of view. If the company fails, it will stop trading and go into liquidation. This means that all the companys property and equipment (its assets) must be sold and the money from the sale will be used to pay all its debts to its creditors. The shareholders may loose the money they paid for the shares. But the personal assets of the owners are protected from the creditors of the company. In other words, the shareholders liability for debts is limited to the value of their shares.
The next advantage of corporation is the ability to attract financial resources. Corporation attracts a large amount of capital it can invest in plants, equipment and research.
Corporation can offer higher salaries and thus attract talented managers and specialists.
Limited companies do not end with the death of owners. It can terminate only by bankruptcy, expiry of its charter, or majority of its shareholders.
Disadvantages
It is more expensive and complicated to establish corporations than proprietorships or partnerships. A charter, which requires the services of a lawyer, must be obtained through provincial government or the federal government.
Limited companies are subject to federal and provincial income taxes. Limited companies are taxed twice: on the profits they earn and on the dividends which come out of the profits.
WORD STUDY
Ex. 18. Study the different meanings of the word share and use it to translate the sentences.
share (n) 1) , ;
to have a share in the profits
lions share
2) ;
3) ; ,
shares are rising ( ); []
shares are down ( ); []
to issue shares
share (v) 1) , ;
2)
3) (-. -.);
4) (, . .)
1. I share your opinion.
2. The Charter should include an agreement on how profits and losses are to be shared.
3. When the company has a sound financial condition its shares are usually rising in the market.
4. It is the very largest billion dollar corporations that get the lion's share of the armament
contracts.
5. All of us had a share in making the decision.
6. Im not a man to share my problems with anybody.
7. After their fathers death the money were equally shared between two brothers.
8. Bill and I shared an office for years.
9. His share in the authorized capital ( ) was 20 percent.
10. I saw that John was very hungry and decided to share my sandwich with him.
