Unit 11. Setting Up a Business.

1. FORMS OF PROPRIETORSHIP. Key vocabulary. (SB page 106)

Many large businesses in the UK are public limited companies (plc), which means that the public can buy and sell shares on the stock exchange. Examples include Marks & Spencer, British Telecom and the National Westminster Bank. The minimum share capital for the public limited company is £50 000, so many new businesses are likely to take one of the following forms:

Sole Trader or Sole Proprietor – The simplest way of starting a business, usually owned by a family. You are self-employed and have unlimited liability for all aspects of finance and management of your business.

Partnership– The partners can contribute tangible capital (money, building, machinery) or intangible assets (famous name, intellect, etc.) All partners are responsible for the debts of the partnership. Profits and losses are shared.

Private Limited Company (Ltd) – a company can be formed with a minimum of two people becoming its shareholders. They must appoint a director and a company secretary. If the company goes out of business, the responsibility of each shareholder is limited to the amount they have contributed; they have limited liability.

In the US businesses have the same basic forms. In order to have the right to issue and sell stock, the corporation is to be registered by the authorities. Legally the owners of the corporation are stockholders who offer the shared capital. The final authority belongs to the Annual Meeting of Stockholders. The corporation is managed by the Board of Directors. The members of BD are elected by the AM. The president of the company is appointed by the BD.

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Tangible capital, tangible assets:Материально- ощутимые активы (напр. Наличные средства, земля, строения), в отличие от нематериальных активов (intangible assets), которые являются физически неощутимыми (напр. патенты, торговые марки или “ гудвил ” (goodwill) – репутация фирмы).