1 Find key words, phrases and the topic sentences which best express the general meaning of each paragraph.

2 Using the information obtained from the paragraphs make an outline of the text.

3. Speak about forms of ownership using key words, phrases, the topic sentences and the outline.

III. Read the three descriptions of company structures.

Sole trader

Partnership

One person sets up and runs the company. The person provides all the capital and has unlimited liability for business debts, even if this means selling personal assets.

Limited company

In a limited company (Am E corporation), the capital is divided into shares, which are held by shareholders. Shareholders have limited liability, but they can vote at the Annual General Meeting to elect the Board of Directors. There are two types of limited company:

1. In a private limited company, all shareholders must agree before any shares can be bought or sold.

2. In a public limited company, shares are bought and sold freely, for example on the stock exchange.

A group of people provide the capital, set up the company and manage it together. There are two types of partnership:

1. Partners in an unlimited partnership are like sole traders -if the business fails they are fully liable for all debts, and may even have to sell personal assets.

2. In a limited partnership there can be sleeping partners who do not participate in the management of the company-Sleeping partners have limited liability in the event of bankruptcy, they only lose their investment, not their personal assets.

1. If a limited company has 5000 shares and each share is worth £2.50, what is the capital of the company?

2. What are the advantages and disadvantages of being a sleeping partner?

3. What is the difference between a sleeping partner and a shareholder?

4. If a private limited company goes bankrupt, do the shareholders lose their personal assets? Why?

5. What are the advantages of a public limited company? Think of three.

VI. Discuss these questions.

Which of the words below can describe:

a) good qualities of an organisation? b) bad qualities of an organisation?

professional

democratic

centralised

impersonal

decentralized

slow-to-respond

cold

paternal

flat

caring

hierarchical

market-driven

disciplined

welcoming

bureaucratic

V. Text c

Read the text.

Types and Forms of business organization

1. Service companies perform services for a fee. This group includes companies such as accounting firms, law firms, repair shops, and many others.

2. Merchandising companies purchase goods that are ready for sale and sell them to customers. They include such companies as auto dealer­ships, clothing stores, and supermarkets.

3. Manufacturing companies buy materials, convert them into prod­ucts, and then sell the products to the companies or to the final customer. Examples are steel miles, auto manufacturers, and so on.

The business entity concept applies to all forms of businesses -single proprietorship, a partnership, and a corporation.

A single (sole) proprietorship is business owned by an individual and often managed by that same individual. Single proprietors include physicians, lawyers, electricians, and other people who are 'in business for themselves'. In a single proprietorship, the owner is responsible for all debts .of the business. Operating as a proprietorship is the easiest way to get started in a business activity. Other than the possibility of needing a local license, there are not any prerequisites to beginning operations.

A partnership is a business owned by two or more persons associated as partners. Partnerships are created by an agreement. Included in the agreement are such terms as the initial investment of each partner, the duties of each partner, the means of dividing profits or losses between the partners each year, and the settlement to be made upon the death or withdrawal of a partner. Accountants, attorneys, and other professionals frequently operate their firms as partnerships.

A corporation is a business owned-by a few persons or by thou­sands of persons. The owners of the corporation are called shareholders or stockholders. They buy shares of stock. If the corporation; fails, the

owners lose only the amount they paid for their stock. The personal assets of the owner are protected from the creditors of the corporation. The stockholders do not directly manage the corporation; they elect a board of directors to represent their interests. The board of directors select the president and vice president, who manage the corporation for the stockholders.

Answer the following questions.

1. What kind of services do service companies perform?

2. What companies can be called merchandising companies?

3. What are the examples of merchandising companies?

4. Why is operating as a proprietorship the easiest way to get started in a business activity?

5. How are partnerships created? Who usually operates the firms partnerships?

6. What kind of business is a corporation?