To set up a new business you have to solve a number of problems. For example, where do you get your supplies from? What is the price you pay for them? What premises do you work from? What type of control do you want to keep in your business? All this depends on the tape of your work, because you may work as a sole trader, a partnership or a limited company.
To work as a sole trader means that you are personally responsible for the business and take all profits after paying income taxes. But you must remember one thing: you are also responsible for all business depts.
Partnership means a group of people (between two and twenty) working as one firm. They share responsibility for decision making, profits, and depts. Partnership is useful and effective when all partners have high professional skills.
A limited company (Ltd) is a company formed by two or more shareholders who put the money into the business and get a share of the profits. Here the financial responsibility (or liability) of the shareholders is limited. When the business goes bankrupt every shareholder loses his share.
So we can see that different types of business organizations have advantages (pluses) and disadvantages (minuses).
Text B.
Borrowing money.
When people set up a new business they need help in financing it. In this case they must know how much money they need to borrow and how many workers they need to employ. To do it they usually draw a cash flow chart.
What is cash flow?
Money can do two things: it comes in and goes out. This is called cash flow. When it comes in faster than it goes out the business if effective and vice versa.
Borrowing money from the bank. The bank managers will lend you money only when they think your business is a good investment. Banks lending money may ask you to provide a security. Security is property that guarantees your ability to pay off your debts if your business goes bust. Sometimes it is enough to provide a guarantor (your friend or relative who can repay your loan for you).
There are different forms of borrowing money. The main two are overdraft and loan.
Overdraft. You can take out more money than you have in your account. The bank sets up the limit. You pay interest on all the sum you borrow on a daily basis. The bank can ask you to repay your overdraft at any moment.
Loan. This is safer than an overdraft because the period of your repay is fixed. But you pay interest on the whole loan though you may need less.
Active vocabulary.
a) to set up a business (syn to start a ~)
to get supplies ,
premise(s) 1. , ;2. ,
shop premises
bank premises
to keep control
to depend on
to work as a
a sole trader ; ()
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a partner ; ; ( )
a partnership ( )
a limited company ;
income tax
to be responsible for smth - -
deb t -
share 1. , , ; ; || , , ; . 2. . ( stock)
shareholder ,
to get a share of profits
to share responsibility
decision making
skill(s) ()
to form a company , , (), to establish
liability ( )
limited liability
to go Bankrupt - ,
business organization , ( , , )
)finance 1. , || ; . 2. , .
to borrow money , ; .
borrowing , .
to employ ,
to draw a chart
cash flow ()
to lend , ,
investment ,
security 1.; ; .2.
to provide a ~
property
guarantee 1. ; ; 2 , ,
guarantor ,
a loan ,
to pay off a loan
to repay (), , ; (),
overdraft 1. (, ) 2. ; 3.
to take out(money) , ()
Interest () , ,
to set up a limit
supplies
Translation notes.
1 a nomber of problems ()
a nomber of , the number of, number , , .
2 supply , . . supply , . supply : 1. , , , , ;2. (), ;3. (. ) ; demana and supply ;4. , ; ;5. () ;6.
3 case ,
in this case
in case of ,
4 vice versa [×vais×v:s] ()
5 to go bust
.
, , , , . , . : to account -, to account for , to allow , to allow for
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Unit 4
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1.
2. ing
3. ed
A Selling
B Taxation
4. Vocabulary
