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ECONOMICS REPORT - A Quick Lesson in Ways Businesses Are Organized

Written by Mario Ritter -- Friday, September 23, 2011 -- Views:

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office meeting
office meeting

This is the VOA Special English Economics Report.

Businesses are structured in different ways to meet different needs.

The simplest form of business is called an individual or sole proprietorship. The proprietor owns all of the property of the business and is responsible for everything.

For legal purposes, with this kind of business, the owner and the company are the same. This means the proprietor gets to keep all of the profits of the business, but must also pay any debts.

Another kind of business is the partnership. Two or more people go into business together. An agreement is usually needed to decide how much of the partnership each person controls.

One kind of partnership is called a limited liability partnership. These have full partners and limited partners. Limited partners may not share as much in the profits, but they also have less responsibility for the business.

Doctors, lawyers and accountants often form partnerships to share their risks and profits. A husband and wife can form a business partnership together.

Partnerships exist only for as long as the owners remain alive. The same is true of individual proprietorships.

But corporations are designed to have an unlimited lifetime. A corporation is the most complex kind of business organization.

Corporations can sell stock as a way to raise money. Stock represents shares of ownership in a company. Investors who buy stock can trade their shares or keep them as long as the company is in business.

A company might use some of its earnings to pay dividends as a reward to shareholders. Or the company might reinvest the money back into the business.

If shares lose value, investors can lose all of the money they paid for their stock. But shareholders are not responsible for the debts of the corporation.

A corporation is recognized as an entity -- its own legal being, separate from its owners.

A board of directors controls corporate policies. The directors appoint top company officers. The directors might or might not hold shares in the corporation.

Corporations can have a few major shareholders. Or ownership can be spread among the general public.

But not all corporations are traditional businesses that sell stock. Some nonprofit groups are also organized as corporations.

And that's the VOA Special English Economics Report, written by Mario Ritter. You can learn more about business and economics on our website, www.unsv.com. We're also on Facebook, Twitter and YouTube  at VOA Learning English. I'm Jim Tedder.

Reader's Comments (4):
Author: alberthan
very useful. thanks.
Author: yuanqiou098
Well,the coorperation in business may bring you success,but sometimes can bring you ruin.I've once give money to one of my friend to let him do his investgate.A thing that can helps you cheat in exams.After some days,he give that thing to me and let me to use it in this Chinese exams.It did work!But,when I was pleased with him,the teacher realized the little trick,and unexpectly grab it away.I was faced with the large amout of money of rebuilt that thing.It was very bad.
Author: Ricardo
Individual proprietorships, partnerships and corporations. These are truly basics. Quite informative.
Author: Jali liu
How about private enterprise ? does it belong to individual proprietorships or corporations ?
Author: Alice
Yeah, coorperation is very important. But most people are selfish. They will think more for themselves during the coorperation.
Author: serena
generally speaking, every one is selfish.we should not blame any one . because we just want to survive .
Author: 紫陌
There are three forms of businesses :the simplest form is indivdual, another kind of business is partnerships and the most complex kind is corporations.
Author: smartguy
sole proprietorship, partnership and corporation are three major forms of business . the sole owner has full responsibility for the debts and profits. however, the partnership is different from the former one. it has several partners, they are limited or full responsliblity partners. limited ones may not share the risk and profit as much as the full ones.
Author: smartguy
The last one is corporation,it is usuallly sell stock for raise money and has many shareholders. the board of directors usually appoint the senior officer of the company.The directors might or might not hold shares in the corporation.Stock represents shares of ownership in a company. Investors who buy stock can trade their shares or keep them as long as the company is in business.A company might use some of its earnings to pay dividends as a reward to shareholders.
Author: smartguy
Or the company might reinvest the money back into the business,If shares lose value, investors can lose all of the money they paid for their stock. But shareholders are not responsible for the debts of the corporation.
Author: Kelly
Alex's pronunciation and intonation are so excellent that they're pleasant to listen to.
Author: Youngerful
I'm a green han.
Author: 爱英语
thanks,it very useful....
it's beauty!!
Author: sky
thanks
Author: hpuzgx
I know
Author: LY
thanks
Author: bobbibd
I'll download this passage and practice it again and again
Author: circles
I knew this ,but It's nice to recall.
Author: happyprince
very good!
Author: Rita
The pronounciation is very good. This report is too long but I really love it .I will recite it.
Author: kaka
thanks!
Author: yecheng li
good
Author: slsr70s
I want to form a corperation.
Author: lala
it's a good article!
Author: SL
It is well worth a read . It make me know busisses organization which contains several forms.
Author: Xiaobi
Good Think you !
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