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1. Write out the words and word combinations that are close in meaning to these adjectives:

Example:energetic = high level of physical energy

Flexible, initiative, decisive, humane, creative, intelligent, altruistic, innovative, curious

2. Translate these word combinations into English:

Брать на себя инициативу, способность рассуждать, достигать целей, преуспевающие предприниматели, удовлетворять потребности, искать возможности, эффективно использовать, приспосабливаться к меняющейся обстановке, последние тенденции.

3. Think and discuss:

The human being is a continual problem-solver, decision-maker and innovator. Analyze your previous week (day, month or year) and describe the situations when you had to be ‘a problem-solver’, ‘a decision-maker’ and ‘an innovator’.

4. Point out in the text 5 characteristics that are tremendously important for an entrepreneur. Prove your opinion.

Chapter 7: Smaller Forms of Business

Small Businesses

There are a number of different forms of business organization and ownership. Some of them are under control of private individuals.

Sole proprietorship

The type of business organization which is described as ‘sole proprietorship’ is one which is owned, run and controlled by one person. Its owner, a sole trader, provides the capital and takes the profits, and is completely responsible for all liabilities. He can use his private savings or get short-term loans and overdrafts from banks to run the business. It is a form of business most common in the service sector, and is typically a small newsagent’s shop or a tradesman’s business such as plumbing or decorating.

The advantages of this form of business organization are that:

  1. Relatively little capital is needed to start the business.

  2. There are few legal requirements to follow.

  3. The owner has complete flexibility of management and control.

  4. Customers receive personal attention.

  5. Profits are retained by the owner.

The disadvantages of sole trade business are that:

  1. The owner has unlimited liability for business debts, which could result in loss of personal possessions such as house and car.

  2. Difficulties can arise because of its small scale, in raising finance.

  3. Lack of continuity of the business may result from the sickness, death or bankruptcy of the owner.

  4. Essential costs are higher for a small business.

  5. The smaller business is more vulnerable to competition.

Partnership

Partnership is a form of business organization which is owned by between two and twenty partners who provide the capital and share the profits. If there’s no agreement, the profits and losses must be shared equally by the partners.

‘Sleeping partners’ contribute capital to the business but do not participate in its organization and management. In ‘limited’ partnerships, a partner can limit his liability to the amount he contributes although at least one partner must have unlimited personal liability for the losses of the partnership.

Partnerships are a form of business most commonly found in medicine, dentistry, law, accountancy, and also in professional services such as plumbing and building.

The advantages of partnership are that:

  1. It allows for the development of specialization and the spread of expertise, ideas, experience, and management skills.

  2. There is access to more finance.

  3. Continuity of the business is assured and partners may progress from junior to full partners.

The disadvantages, on the other hand, are that:

  1. Ordinary partners have unlimited liability for the debts of the business.

  2. Conflict and disagreement between partners are possible.

  3. There is a risk of dissolution of the business, for example, through the death or bankruptcy of a partner causing loss of capital.

Do you know these words?

liability

ответственность

pl. liabilities

долги, денежные обязательства

overdraft

сумма, получаемая по чеку сверх остатка на текущем счёте

tradesman

ремесленник, мастеровой

to retain

сохранять

continuity

непрерывность (продолжение работы)

vulnerable

уязвимый

expertise

специальные знания

dissolution

ликвидация