E. Match the words and word combinations

1) to fold	to fail financially, to be unable to pay debts
2) to go into business/ to set up a business	to start selling shares in a business or company for the first time
3) to take on staff	to be involved in the process of collecting information about markets
4) to float the company/ to go public	to start working in a particular group of people for doing business
5) to make a profit	to close because of not being successful
6) to go under/ to go bankrupt	amount of business a company does in a year
7) annual turnover	to fail to keep money
8) to carry out market research	to be in charge of the company
9) to make a loss	to create or establish a business
10) to run a business	to start selling a product
11) to go into partnership	to employ somebody, to hire
12) to launch a product	to make money

Reading 1: Types of Businesses

A. Study the topical vocabulary.

sole trader/sole proprietorship	индивидуальное / частное предпринимательство
to be liable for/to be responsible for	нести ответственность за
debts	долги
to have unlimited liability	иметь неограниченную ответственность
to have limited liability	иметь ограниченную ответственность
advantage (over smth.)	преимущество (над чем-либо)
disadvantage/drawback	недостаток
start-up cost	издержки освоения нового предприятия
to make decision	принимать решение
to keep profit	оставлять прибыль себе, распоряжаться ею
to share	делить, распределять
partnership	товарищество
sleeping partners	негласный партнер, пассивный партнер
to sue	подавать иск
assets	имущество
shareholder	акционер
to apply for a corporate charter	подать заявку на корпоративный патент
officer	должностное лицо
to supervise daily management	осуществлять ежедневное руководство
to have a final authority	иметь решающее слово
Board of Directors	Совет Директоров
private limited company (Ltd)	закрытая акционерная компания
transfer of shares	размещение акций
stock exchange	фондовая биржа
to be traded	торговать
public limited company (plc)	акционерная компания открытого типа
joint venture	совместное предприятие
franchising	франшиза
franchisee	предприятие, получившее право продажи марочного товара фирмы
franchisor	франшизодатель
retailer	розничное предприятие, фирма
non-profit corporation	некоммерческая корпорация
to be exempt from taxation	не подлежать налогообложению

B. Before you read discuss the following questions.

1) What should you do before starting your own business?

2) What kind of organization do you want to work for?

3) Do you expect to have one immediate boss, to work for more than one superior or to be part of a team?

C. Read the text and name the main types of businesses mentioned in it.

Sole trader /sole proprietorship

A sole trader is the simplest form of business organization. It describes any business that is owned and controlled by one person - although they may employ workers. Individuals who provide a specialist service like plumbers, hairdressers or photographers are often sole traders.

In the eyes of the law, the business and the owner are the same. As a result, the owner is personally liable for the firm's debts and may have to pay for losses made by the business out of their own pocket. This is called unlimited liability. This type of business has the following advantages: it is easy to set up as no formal legal paperwork is required, generally; only a small amount of capital needs to be invested, which reduces the initial start-up cost; as the only owner, the entrepreneur can make decisions without consulting anyone else; the owner keeps profit. Along advantages there are also disadvantages: sole trader has no one to share the responsibility of running the business with; he often works long hours and he may find it difficult to take holidays or time off if he is ill; he faces unlimited liability (owner is personally liable for all debts) if the business fails.

Partnerships

Partnerships are businesses owned by two or more people but no more than twenty. They share profit usually by agreement according to their contributions. Doctors, dentists and solicitors are typical examples of professionals who may go into partnership together and can benefit from shared expertise. Some advantages of partnership are that there is someone to consult on business decisions and more capital.

The main disadvantage of a partnership comes from shared responsibility. Disputes can arise over decisions that have to be made, or about the effort one partner is putting into the firm compared with another. Like a sole trader, partners have unlimited liability. Moreover there is more paperwork and interpersonal relations between partners may require both time and tact.

There may also be “sleeping partners” who own a share of the business contributing capital to the business, but do not participate in its organization and management.

Limited companies

A limited company is incorporated, which means it has its own legal identity and can sue or own assets in its own right. The ownership of a limited company is divided up into equal parts called shares. Whoever owns one or more of these is called a shareholder.

As limited companies have their own legal identity, their owners are not personally liable for the firm's debts, only for the amount of contributed capital. The shareholders have limited liability, which is the major advantage of this type of business structure.

To form a corporation one should apply for a corporate charter. Obtaining the charter the stockholders, as owners, hold a meeting to organize the corporation, elect the Board of Directors and choose the company's officers. Though the officers of the company supervise daily management, the stockholders always have the final authority. They vote at annual meetings.

Unlike a sole trader or a partnership, the owners of a limited company are not necessarily involved in running the business, unless they have been elected to the Board of Directors.

There are two main types of limited company:

A private limited company (Ltd) is often a small business such as an independent retailer in a market town. There is a restriction on the number of members from 2 to 50. There are also restrictions on the transfer of shares which are not traded on the stock exchange.

A public limited company (plc.) is usually a large, well-known business. The number of members from 7 and no limit above this. This could be a manufacturer or a chain of retailers with branches in most city centers. Shares are traded on the stock exchange freely.

Franchising

An entrepreneur can opt to set up a new independent business and try to win customers. An alternative is to buy into an existing business and acquire the right to use an existing business idea. This is called franchising.

A franchise is a joint venture between:

A franchisee, who buys the right from a franchisor to copy a business format.
And a franchisor, who sells the right to use a business idea in a particular location.

Many well-known high street opticians and burger bars are franchises. Opening a franchise is usually less risky than setting up as an independent retailer. The franchisee is adopting a proven business model and selling a well-known product in a new local branch.

There is one more type of business organization that is different from the above ones. A non-profit corporation is usually created with a specific purpose, such as for educational, charitable, civic or artistic. Nonprofits are generally exempt from federal and state taxation on their income.

D. Choose the correct answer according to the information from the text:

1. What is the main advantage of being a sole trader?
a) unlimited liability	b) limited liability	c) be able to make quick decisions
2. Who is limited liability an advantage to?
a) shareholders	b) stakeholders	c) sole traders
3. What is a partnership?
a) a business owned by shareholders	b) one person trading alone	c) two or more individuals trading together
4. Who is a company controlled by?
a) shareholders	b) stakeholders	c) managers

5. What is a business that sells the right to use a business idea?
a) a franchisor	b) a franchise	c) a franchisee
6. Which of the following is NOT an advantage offered by a franchise?
a) a prime location	b) a tested product	c) a well-known brand

7. Who is a franchise bought by?
a) a franchisor	b) a franchisee	c) a wholesaler

8. Which type of business does NOT usually have limited liability?
a) a public limited company	b) a multinational	c) a partnership
9. Who has legal responsibility to settle debts in a company with unlimited liability?
a) owners	b) shareholders	c) stakeholders