Unit 3

BUSINESS ORGANIZATIONS
The etymology of business refers to the state of being busy doing some profitable work. The usages of the term business may refer either to a particular company or corporation, or to a particular market sector, such as the computer business. There are different kinds of business forms with different structures and rules. The three major types of business organisations are: the sole proprietorship, the partnership, and the corporation. Sole Proprietorships - A sole proprietorship is a business structure in which one person is the owner. The owner has full control/authority of its business and owns all the assets, suffers all losses or enjoys all the profits. A sole proprietorship must apply for a Business Name and be registered with the Department of Trade and Industry. The business may employ few or many people, but there is only one owner, who runs the business and makes the profits or losses. A major advantage of a sole proprietorship is that a business may begin under this form of organisation with little cost and legal work. Although sole proprietorships are relatively small businesses, some of todays great businesses began as individually owned enterprises. For example, companies such as the Ford Motor Company, Levi Strauss and Co., and McDonalds originally were founded and owned by one individual. Partnerships - A partnership is a business entity that consists of two or more partners and has a separate legal personality from that of its members. Partnerships may either be general partnerships, where the partners have unlimited liability for the debts and obligation of the partnership, or limited partnerships, where one or more general partners have unlimited liability and the limited partners have liability only up to the amount of their capital contributions. Some partnerships such as the large international firms have hundreds or even thousands of partners. There are different types of partnership agreements. Individuals may be equal partners or have unequal interests in the partnerships profits and losses. There are silent partners, who contribute funds to the enterprise but do not engage actively in the business, and active partners, who run the business. Organisation of a partnership does not require the formal approval of a state or other governmental agency. A partnership requires merely an oral or written agreement among the people who are to be partners. The partnership agreement should specify the distributions of profits and losses and settlements in the event of illness, incapacity, or death of a member. Corporations - A corporation is a business entity that is viewed legally as separate and distinct from its owners, who are termed stockholders. The liability of the shareholders of a corporation is limited to the amount of their share capital. The documents include the corporations name, principal location of business, and the number of shares that is authorised for sale to the public. Ownership in a corporation is designated by stock certificates. Ownership of stock is equivalent to ownership of a proportionate share of the corporation. State laws govern the sale or transfer of corporate stock from one person to another. In contrast with a sole proprietorship, a corporation is a separate legal entity. As a result, the owners of the corporation have limited liabilities. However, the amount that they have invested in the corporation is available to satisfy corporate debts. This limited liability of corporations enables them to obtain funds from many owners who want to invest for the opportunity of increasing the value of their stock. These owners may not wish to participate actively in the operations of the enterprise. Therefore, corporations usually have a separation of ownership from management. The stockholders elect a board of directors, who may not be owners. The board, in turn, appoints the officers of the corporation (president, vice-president, treasurer, secretary) to manage the business. Many large corporations are publicly owned, which means that the corporations stock is bought and sold by the public on the Stock Exchange. Thus individuals can easily buy or sell shares of stock of corporations. As a result, large publicly held corporations have hundreds of thousands and, in some cases, over a million shareholders. A corporation can either be stock or non-stock company. Stock Corporation - This is a corporation with capital stock divided into shares and authorized to give the holders dividends or allotments for the surplus profits on the basis of the number of shares held. Non-stock Corporation - It is a corporation organized principally for public purposes such as charitable, educational, cultural or similar purposes and does not issue shares of stock to its members. I. Answer the questions: 1. Enumerate three major types of business organisations. 2. What is a sole proprietorship? What major advantage does a sole proprietorship have? 3. What is a partnership? What are the characteristics of general partnerships and limited partnerships? 4. What is a corporation? Who are the owners and who are the managers in a corporation? 5. Should you start your own business, what field of activity would you choose and why? 6. Speak about a successful company in Romania or abroad.

II. Give synonyms for: company, profitable, requirement, to apply for, unlimited, owner. III. Write the word family of TO EMPLOY. IV. Choose words from the box to complete the sentences that follow: Reason = because, as, so, since, therefore, consequently Contrast = although, in spite of, but, however, yet, nevertheless 1. 2. 3. 4. 5. 6. 7. 8. Brand-stretching can be very risky it can also be very lucrative. The value of promotions is questionable, most consumers switch back to their usual brand when the promotion ends. Companies have to keep their shareholders happy. , brand managers are under pressure to find ways of boosting sales. a brand may sell well in one country, it may not sell at all in another. Price is a signal of quality, consumers will often pay more for premium brands. In 1991, advertising accounted for around a third of all marketing outlay, , in 1980, the picture was very different. their disappearance from the market, Mac food blenders continued to rank second with consumers 20 years later. 85% of small businesses fail within the first 5 years fail . they run out of money.

V. Give the corresponding nouns: to account, to own, to employ, to lose, to agree, to contribute, to venture, to require, to approve, to withdraw, to settle, to apply, to sell, to invest. VI. Find the appropriate definitions for the terms below: 1. transaction 2. corporation 3. treasurer 4. joint venture 5. owner 6. shareholder a. business activity begun by two or more people or companies working together b. someone who is in charge of the money for an organisation, club, political party c. a big company, or a group of companies acting together as a simple organisation d. d. someone who owns shares in a business e. a business deal f. someone who owns something

VII. Put the verbs into the Present Simple or Present Continuous according to the case: a. State laws generally .. the sale or transfer of corporate stock from one person to another. (to govern) b. The manager is busy at the moment as a new customer .. to him. (to talk) c. They .. us the price lists this week. (to send) d. A partnership .. an oral or written agreement among the people who are to be partners. (to require) e. The stockholders .. a new board of directors at the moment. (to elect) f. Corporations often .. partners in joint ventures. (to become) g. The liability of the shareholders of a corporation .. limited to the amount of their share capital. (to be) h. All employees .. actively in the operations of this enterprise. (to participate) i. In general, corporations a separation of ownership from management. (to have) j. These owners their shares now as they want to start another business. (to sell) VIII. Translate into English: Dezvoltarea unei afaceri n Romnia n general, nu este necesar nici o autorizaie legal special pentru nfiinarea unei afaceri n Romnia. Procedura general de nfiinare presupune ndeplinirea anumitor formaliti legale: obinerea unei decizii judectoresti, nregistrare la Registrul Comerului i la Autoritatea Financiar. O persoan fizic sau juridic poate face investiii n Romnia sub o varietate de forme legale. n concordan cu practica i legislaia international, societile comerciale, se clasific astfel: societi cu rspundere limitat (SRL), societi pe aciuni (SA), parteneriate. IX. Translate into Romanian: Starting a business in todays environment brings opportunities and challenges. New lifestyles demand greater choice of products and services. New technologies and greater access to global markets have provided increased business opportunities. At the same time increased competition, insistence on quality and unremitting pressure for lower costs, just to mention some issues,

represent major challenges for business. For Small and Medium-sized Enterprises (SMEs) the challenge is greater. They lack resources and the capacity to handle complex business management. Typically, less than half survive more than five years and only a small proportion go on to become large companies. How to ensure the growth of the Romanian SME sector a fundamental feature of all developed and growing economies is a major economic challenge. SMEs are a vital source of new jobs, exports and economic contribution to our country. The economic revitalisation of South East Europe is primarily dependent on private sector investment. The environment for creating and sustaining businesses is still underdeveloped in Romania. Reforming and improving the environment for entrepreneurship is a priority nowadays. X. Express your opinion on our countrys economic opportunities and challenges.