Unit 39. Distributing shares of the Limited Company

A B

join sole proprietorship

purpose aim

sole trader propose

offer unite

organize stock

personal arrange

share individual

Exercise 3. Match the word with the correct definition from the list below:

sole proprietorship, unlimited company, shares (2), partnership, asset, debt, private limited company, limited liability company, stock exchange, shareholder, wealth;

1. a firm run by two or more partners;

2. a business owned by one person;

3. a company in which the owners are entirely liable for the debts of the company;

4. a company in which the owners are liable only for the amount of money they invested in the business;

5. a company that may not offer its shares for sale to the public;

6. a company whose shares can be bought and sold on the stock exchange;

7. money owed by one person or an organization to another;

8. an item of value belonging to a person or a company;

9. one of many portions into which a company’s capital is divided;

10. a market where stock and shares are bought and sold under fixed rules;

11. a person who owns shares in a company and, is, therefore, a member of the company;

12. owing a large amount of money, goods or property.

Exercise 4. Put an appropriate word in the sentences:

stock exchange, wealth, purpose, shareholders, sole trader, partners, shares, assets, debts, partnership, sole proprietorship.

1. The person operating a … … owns the business by his own way.

2. Formed by two or more persons, the … is considered a business entity. Each partner is responsible for the ….

3. All personal … of each partner are at risk if the business falls.

4. … receive dividends in proportion to the capital they invest.

5. Being a … … she works long hours in her hairdressing business.

6. The partnership collapsed as a result of the criminal activities of one of the ….

7. He has … in Great Britain.

8. He is a man of great ….

9. The … of going to school is to learn.

10. He workers as a computer operator at the New York … ….

Exercise 5. Answer the following questions:

1. Are all businesses owned and organized in the same way?

2. What is the simplest form of business ownership?

3. What are the owners liable for in unlimited liability companies?

4. What are the owners liable for in a limited liability company?

5. What are unlimited companies subdivided into?

6. What is the partnership?

7. What is the private limited company?

8. What is the Corporation? Its advantages and disadvantages?

Exercise 6. What is the difference between:

§ sole proprietorship – partnership;

§ partnership – corporation.

Exercise 7. Sum up what the texts says about:

o sole trader;

o partnership;

o corporation;

o unlimited liability company;

o limited liability company.

Active Vocabulary

invest put in fixed capital (fixed assets) majority shareholder	вкладати капітал вкладати капітал уставний капітал власник основного пакета акції
shares benefit ratio profit and loss private limited company stock exchange do well go into liquidation pay debts liability sole proprietorship partnership go bankrupt	акція розподіл прибутків прибуток та витрати приватна компанія з обмеженою відповідальністю фондова біржа досягати успіхів ліквідуватись виплачувати борги відповідальність приватне підприємство засноване однією особою партнерство збанкрутувати

Four men, Mr Somov, Mr. Menshov, Mr. Antonenko, and Mr. Petrov have started a limited company. They are shareholders. Mr. Somov invested 20,000 grivens. Mr. Menshov put in 10,000 grivens, Mr. Petrov’s contribution was 55,000 grivens, the capital of Antonenko being 15,000 grivenes. The fixed capital (fixed assets) is 100,000 grivnes.

Mr. Petrov is the majority shareholder (he owns the most shares). Mr. Petrov has a controlling interest (he owns more than 50% of the shares). The company’s capital (the money for buying goods and equipment) is 100, 000 grivnes. The profit is divided between shareholders. The profit is divided by the invested shares, it’s called benefit ratio. The shareholders maycontrol profit and loss, but another appointed person are responsible for it.

When a limited company has started trading, you do not invest in shares by giving more capital to the company. You buy them from one of the Shareholders. If it is a private limited company, a shareholder can only sell shares if all the other shareholders agree. If it is a public limited company, shares can be bought and sold freely, usually at the Stock Exchange. If the company is do ing well and paying high dividends, then you might pay more then the face value of the shares. If it is doing badly, you might pay less than the face value of the shares. The price you pay at the Stock Exchange or to a shareholder for your shares is their market value. If the company fails, it will stop trading and go into liquidation. This means that all the company’s property and equipment (its assets) must be sold and the money from the sale will be used to pay its debts to its creditors. The shareholders may lose the money they paid for the shares. If the company still does not have enough money to pay all its debts, the shareholders, do not have to pay any more money. In other words, the shareholders’ liability for debts is limited to the value of their shares. On the other hand, if you are an owner of a business which is not limited, for example a sole proprietorship (owned by one person) or a partnership (owned by between 2 and 20 people) and your business fails, you will go bankrupt. In this case you might have to sell your own private possessions (your house, car, furniture, etc) to pay all your creditors. Other words, sole proprietors and partners have unlimited liability for their firm’s debts.

Exercise 1. Give for the English:

вкладати капітал, уставний капітал, акції, приватна компанія з обмеженою відповідальністю, партнерство, фондова біржа, розподіл прибутків, ліквідуватись, виплачувати борги, відповідальність.

Exercise 2. Put an appropriate word or phrase in the sentences:

benefit ratio, go bankruptcy, company, fixed capital, sole proprietorship, assets, lender, profit, major shareholder.

1. The money shareholders put into a company to buy property and equipment

so that it can start is called ….

2. One of the owners of a partnership is ….

3. The price you pay for shares when the company has started trading is their ….

4. To put money into a business or a bank account so that it will make a profit is to ….

5. The sole (owner) of a business is ….

6. Something belonging to a person or a business which can be sold is ….

7. A person you owe money to is ….

8. When a limited company fails, it ….

9. Another name for a business is ….

Exercise 3. Translate the following sentences:

1. Ці люди є інвесторами і власниками акцій.

2. Він головний власник акцій.

3. Щоб розпочати справу, необхідно взяти позику в банку.

4. Капітал компанії розподіляється на 50, 000 акцій, кожна з яких має ціну

5. 1 долара.

6. Компанія з обмеженою відповідальністю називається так тому, що, вона несе обмежену відповідальність перед кредиторами у випадку її ліквідації або банкротства.

7. Акції продаються на біржі.

8. Якщо компанія терпить крах, вона зупиняє торгівлю і ліквідується.

9. Якщо компанія досягає успіхів і платить високі дивіденди, її акції

10. мають високу ціну.

11. Компанія з обмеженою відповідальністю у випадку ліквідації або

12. банкрутства продає все своє майно, включаючи і особисте майно

13. засновників, щоб виплатити борги кредиторам.

14. Одноосібні підприємці несуть обмежену відповідальність за борги свої

15. фірми.

Exercise 4. Answer the following sentences:

1. Who is the major shareholder in the Private Limited Company?

2. Where can the shares be bought?

3. If the company is doing well, how will you pay for the share?

4. What will the company if the company do if it fails?

5. Why is the company called «limited»?

6. Why is the company called «unlimited»?

7. To whom and for what are the founders of a company responsible in the case of the company’s liquidation?

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