III. Read the text and check up your answers in ex. II. When talking about companies it’s necessary to mention its three traditional forms
When talking about companies it’s necessary to mention its three traditional forms. The first one is the sole proprietorship (or the sole trader), the second is the partnership and the third is the limited company (or the corporation). Let me now describe each of them in turn.
The sole proprietorship is a form of business owned by a single individual. In Belarus these individuals are mainly called entrepreneurs. They may sell different goods at the markets; they can have retail stores, small cafes and so on. It’s the easiest form of business to organize. All you need to have is just a good business idea, some money, licences, etc., and of course you should work very hard. The advantage of this type of business is that you are the owner which means you get all the revenues. But at the same time you are legally liable for all the debts of your business. This means if you are in trouble you should repay everything from your own pocket.
The partnership resembles the previous form of business. The difference is that it’s an enterprise owned by two or more individuals. Usually there is a partnership agreement in which we include the rights and obligations of each partner. The advantage of partnerships is that partners may have different skills for running the business. For example, one is good at financial and management issues of business, while the other can deal with legal and marketing aspects and so on. The main disadvantage is again that the partners are liable for all the debts.
As for the third form of business, it’s called the limited companies(or corporations). The difference from the previous forms is that limited companies are created by law and are separate from the people who own and manage them.
In limited companies ownership is represented by shares of stock which belong to shareholders, the owners of the company. They usually meet once a year, at an annual general meeting (AGM), to elect the board of directors. The board of directors in turn appoint company managers who set company objectives, design effective organization structures and, on the whole, direct the company.
The advantage of limited companies is that they are less risky. The owners only risk their share in the company. Their personal assets remain untouched.
As for large corporations I should mention that bigger businesses can supply goods and services to a greater number of people than smaller ones. The goods and services are often much cheaper because they are produced in large quantities and hence their costs are lower. In addition, we recognise their brand names more easily which is also connected with good quality. These companies are financially stronger because they can sell their shares on the stock exchange and raise more capital.
But I believe small companies are vital to every economy because they create jobs for the people of this or that country. I reckon it’s a very good business philosophy to develop small business as well as big business in the today’s highly competitive world.
To sum it up, I have to say it doesn’t matter what form of business you are in. The main point is to be a good specialist. If you are the one you will always be in demand, and the economy will only benefit from it.