Types of proprietorship

A business may be privately owned in three different forms. These forms are the sole proprietorship, the partnership and the corporation. The sole proprietorship is the most common in many western countries. For example, more than 80 per cent of all businesses in the United States are sole proprietorships.
But it is evident that sole proprietorships do not do the greatest volume of business. They account for only 16 percent of all business receipts, for example, in America. What kind of business is likely to be a sole proprietorship? First of all, service industries such as laundromats, beauty shops, different repair shops, restaurants.
Active Vocabulary
business справа
to own володіти
sole proprietorship приватна власність
partnership партнерство
corporation корпорація
volume об’єм, кількість
receipt грошові надходження
service industry сфера обслуговування
to account for пояснювати, звітувати
repair shop майстерня
Comprehension Questions
1. What are three different ways that a business can privately owned?
2. What forms do most European countries have?
3. What forms do the businesses in the USSR have?
4. Name some businesses that are likely to be sole proprietorships. Why do you think so?
5. Name some businesses that are not likely to be sole proprietorship? Why do you think so?
Vocabulary Practice
Exercise 1. Choose the necessary word and put it in the sentence.
1. Small... are very often service industries. 1 receipts
2. The... industries don't produce material goods. 2 business
3. More than 80 per cent of all business... are not from
sole proprietorships. 3 service
4. Less than 20 per cent of European businesses are partnerships or... 4 privately
3. Sole proprietorships... only a small part of all business receipts. 5 account
6. Is this bank owned publicly or... ? 6 corporation
7. There are three... of business ownership. 7 forms
Dialogue
Jim Hi, Alice. How are you getting on?
Alice Fine, as usual, thanks, Jim. What about you?
Jim I'm O. K. It's nice to see you.
Alice You too. I'm glad you are not in a hurry and we have time to talk today.
Jim Sure.
Alice Can you give me a piece of advice?
Jim Well, I'll try if I can.
Alice You know I've been always good at cooking. It interests me. I am thinking
of starting my own business - cafe.
Jim It might be a good idea.
Alice I guess I must learn about the responsibilities of going into business.
Jim Are you going into this business by yourself?
Alice Exactly. I'd like to have a cafe with my name on it where I make the
decisions and where I control the profits.
Jim You seem to be resolute so I'll try to help you. If you go into business alone, it is called sole proprietorship. In such case you needn't consult a lawyer to form the business. You can start or you can stop your business whenever you like.
Alice It sounds encouraging. What else can you tell me?
Jim There is no need to consult partners or a board of directors. So you can put your policies into effect quickly. You decide on your vocation, hours, salary, hiring and firing.
Alice Well, that's not bad.
Jim Wait a moment. I believe I have to tell you about the risk involved.
Alice What do you mean?
Jim First of all, the most important risk is that you have unlimited liability. It
means that you are responsible for all your business debts.
Alice So if the business fails, I have to declare personal bankruptcy, don't I?
Jim That's what I mean. You can lose your personal assets.
Alice Well, it's rather disappointing. What other things should I know?
Jim You won't get tax benefits which partnerships or corporations can get.
Alice I know about it. By the way do you know of a good accountant to do my taxes?
Jim Of course. You'll also have to hire a good bookif you can't do your books yourself.
Alice I can't say anything definite about that. I have to think it over. What else, Jim?
Jim Well, I am a bit hungry, why don't we have a snack together and discuss
the things in the cafe.
Alice You are right as usual. Let's go.
Active Vocabulary
piece of advice порада
can you give me a piece of advice не могли б ви мені дати пораду
I am thinking of starting my own business я думаю про те, щоб почати
власну справу
responsibility відповідальність
to make decisions приймати рішення
to control the profits контролювати прибуток
sole proprietorship приватна власність
to need a lawyer потребувати послугу юриста
it sounds encouraging це надихає
to consult partners консультуватися з партнерами
a board of directors рада директорів
to put policies into effect quickly швидко досягти гарних результатів
to hire наймати (на роботу)
to fire звільняти
to decide on vacation, hours, вирішувати питання, пов’язані з
salary, hiring and firing відпусткою, тривалістю робочого дня,
зарплатнею, наймом, звільненням
to have unlimited liability мати необмежену юридичну
відповідальність
to be responsible for all business debts нести відповідальність за
виробничі борги
to fail зазнавати невдачі
to declare personal bankruptcy оголосити про особисте банкрутство
personal assets приватна власність
tax benefits пільги по оподаткуванню
to get tax benefits отримати пільги по оподаткуванню
accountant бухгалтер, рахівник
book-keeper бухгалтер, рахівник
to do books вести бухгалтерський облік
Vocabulary Exercises
Exercise 1. Transform the sentences according to the model.
Model: I am thinking of starting my own business open a cafe.
I am thinking of opening a cafe.
1) start a car-repair shop
2) hire a book keeper
3) fire an employee
4) consult a board of directors
5) sell my business
6) do my books myself
7) consult a lawyer
8) find a specialists
Exercise 2. Transform the sentences according to the model.
Model: A book keeper will do the books.
I am going to have a book keeper do the books.
1. A partner will finance the business.
2. A salesperson will sell the clothes.
3. A decorator will design the interier.
4. A lawyer will do this work.
5. A secretary will mail the letters.
6. A colleague will give me a piece of advice.
7. A book keeper will prepare the tax report.
Exercise 3. Answer the questions.
Are you thinking of starting your own business?
2. What business do you want to start?
3. How do we call the business if you go into it alone?
4. Who is going to make the decisions and control the profits in your business?
5. Do you need a lawyer if you want to start a sole proprietorship?
6. Why don't you have to consult the partners in a sole proprietorship?
7. How many employees are you going to hire for your business? In what cases will you fire them?
8. What does it mean to have unlimited liability? Are you ready for it?
9. What will you do, if your business fails?
10. What will you do to put policies into effect quickly?
11. What businesses have tax benefits in this country?
12. Can you do your books yourself?
13. Are you going to hire a book-keeper?
Exercise 4. Translate into English.
1. Мені потрібна порада.
2. Я сам контролюю прибуток свого підприємства.
3. Якщо ви хочете зайнятися приватним підприємництвом, зверніться до юриста.
4. Директор вирішує питання, пов’язані з наймом та звільненням.
5. Я боюсь мати повну юридичну відповідальність.
6. Я не відповідаю за виробничі борги.
7. Малі підприємства мають пільги в оподатковуванні.
8. Гарний бухгалтер зможе вести справи краще, ніж ви.
9. Мені потрібно найняти бухгалтера.
10. Мені потрібно порадитися з юристом.
Exercise 5. Make up the dialogue.
You are going to start your own business. Ask a lawyer or an experienced person how to do it.
Grammar Exercises
Exercise 1. Make the sentences negative.
1. I want to start my own business.
2. You need a lawyer in this case.
3. Sole proprietorship brings much profit.
4. Sole proprietorship gets tax benefits from the government.
Exercise 2. Put up four questions of different types (general, special, disjunctive, alternative) to each sentence.
Model: The partners are responsible for business debts.
a) Are the partners responsible for business debts?
b) Why are the partners responsible for business debts?
c) The partners are responsible for the business debts, aren't they?
d) Are the partners responsible for the business debts or fulfillment of
the arrangement?
1) I want to go into business with my friend.
2) You can lose personal assets.
3) He is difficult to get tax benefits from the state.
4) I do my books myself.
5) We both have unlimited liability.
6) The board of directors decided on vacation, salary, hiring and firing.
7) The partners want to consult a board of directors.

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