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• JARA PRADO LILIANA

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TECHNICAL ENGLISH I

LESSON THREE

WHICH ARE THE TYPES OF BUSINESSES? CONTENT: * Definition • Types of business • Classification

L

SITUACION: Luis tiene que ester listo para realizar auditorfas y preparar estados financieros para todo tipo de empresas. Primero tiene que saber cuales son los tipos principales de empresas y come se ciasifican en ingles.

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LiHa

Evelyn Guzm 6 n Vidal

BUSINESS Every form of organization uses accounting information. As each country may have its own regulations or requirements for the different types of businesses we will treat them as they exist in the United States, according to legal provisions.

BUSINESS: Los tipos de empresas se trataran como se yen en EUA.

Accounting is used in all types of businesses. Organizations in general may be divided in two major groups: not for profit organizations and for profit organizations. Not for profit organizations are those like charitable or religious Institutions that do not have profit as their main goal. While for profit organizations are created for business undertakings. These may be divided in three general types: a) Sole Proprietorship, b) Partnership, and c) Corporation. Sole Proprietorship is a business owned by one person who is often the manager of the business. Small businesses are often sole proprietorships. The owner is the only responsible for all the profits and/or losses, and is personally liable for all debts of the business. The owner and his business are treated as separate entities for accounting purposes. Partnership is a business formed by two or more persons associated as partners. Each partner generally has unlimited personal liability for the debts of the partnership. This association is legally based upon a partnership agreement or contract, called «the articles of copartnership.» Partnerships are generally formed by small businesses. Accounting for partnerships is similar to a sole proprietorship, except for the capital and drawing account kept for each partner. Partnerships are often used to organize retail and service-type businesses, including professional practices.

BASIC GROUPS OF FIRMS: For-Profit and Not-for-Profit.

TYPES OF BUSINESS: 1 .Sole Proprietorship 2.Partnership 3.Corporation

«The characteristics of a partnership are: Formation requirements Agency relationship Co-ownership of assets Limited life Unlimited liability Participation in profits and losses Articles of partnership>, Eisen, Peter J.(1995:213) Corporation is a form of business organization created under the laws of a particular state. It is a legal entity separate from its

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TECHNICAL

ENGLISH

owners. The primary difference in accounting for a corporation is in the area of the capital of the organization. It is formed by Stockholders or Shareholders. These are people who hold stocks from the corporation. These stocks may be: common or preferred. Most of the largest enterprises in the United States are corporations. «There are many types of corporations: ❖ Unlimited Life ❖ Profit Corporations ❖

Not for Profit Corporations

❖ Public Corporation ❖ Close Corporation.» Eisen, Peter J. (1995:229) READING ADAPTED FROM: TM

Castro de Bravo, Bertha (1994:43-44)

TM

Eisen, Peter J. (1995:5, 213, 229)

TM

Weygandt, Jerry J. y otros, (2000:11)

TM

Horngren, Charles t. y otros (1996:8-10)

iifiDiIC

LUIS: Well, Tom. I have to decide if I'm going to specialize in an Anonim Society or in a Limited Liability. TOM: Sorry, Luis. In the States there is no Anongym Society. But you can find Limited or Unlimited Liabilities, Companies, Incorporations and Corporations. LUIS: So, I still have to learn about types of businesses and the American regulations. TOM: That's it! You got it! But I know you'll do it. LUIS: Thanks, Tom.

SUMMARY Basic groups of Firms: Not for profit and For profit. For profit Organizations are divided in: a) Sole Proprietorship, b) Partnership and c) Corporation.

Sole Proprietorship is a business formed by one owner. Partnership is formed by two or more owners called partners. Corporation is a firm formed by stockholders or shareholders. The Stockholders are people who hold shares or stocks of the corporation. The kinds of stock are: common and preferred.

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Lilia

Evelyn Guzman Vidal

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EXERCISES A: Fill in the missing words in the sentences below. Choose from the following Profit

Shareholders

Products

Competitors

Turnover

Company

Subsidiaries

Employees

Leader

Customers 1

Tomorrow I have an interview in a

called Sweetland.

2. Sweetland produces candies as its main 3.

Its goal is to become a

in our country.

4. The company has about 1,500

just in Lima.

5.

It pretends to expand to other countries with at least three

6.

Its

are very glad with their products.

7. Some of its 8.

Its main

do not have the same success. are its own employees.

9. Last year was its best, with a

of $2.9 billion.

10. This was a great success for the company to get

$28 million as

B: Match the following ideas 1. A Sole Proprietorship is

a) formed by stockholders.

2.

There are two kinds of

b) shares of the corporation.

3.

A Partnership is formed

c) formed by one owner.

4.

The stockholders hold

d) stock: common and preferred.

5.

A Corporation is usually

e) by two or more partners.

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TECHNICAL ENGLISH I

6.

Accounting for a Partnership

1

2

f) is like for a Sole Proprietorship.

3

4

5

6

C: Listen carefully and fill in the blanks 1. Accounting is needed by every form of 2. Those that do not have the profit as main goal are the 3. A business known as a 4. When we have a one owner. 5.

Partnerships are usually

6.

Each partner has his own

type.

has only one proprietor. it means that there are more than rather than large businesses.

7. The corporation is formed by 8. They are people who

from the property of the business.

9. There are two types of stocks: 10. The largest business in the USA are usually

VOCABULARY 1.

Agreement acuerdo

2.

Articles of Copartnership Escritura de Sociedad

3. Assets activo 4.

Business empresa, negocio, cornercio

5.

Charitable caritativas

6.

Common comunes

7.

Competitiors competidores

8.

Contract contrato

9.

Corporation corporaciOn

10. Customers clientes 11. Debt deuda 12. Drawing Account cuenta corriente, cuenta de retiros 13. Employees empleados 14. Entities entidades 15. For profit con fines de lucro, lucrativos 16. Goal meta 17. Hold tener, poseer 18. Law ley

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Lilia

Evelyn Guzman Vidal

19. Leader lider

34. Purpose prop6sito, fin

20. Legal legal

35. Regulations reglamentos

21. Liability responsabilidad

36. Requirements requisitos, requerimientos

22. Liable responsable

37. Retail minorista

23. Loss perdida

38. Shareholders accionistas

24. Major principal(es)

39. Shares acciones

25. Manager gerente, administrador 26. Not for profit sin fines de lucro, no lucrativos

40. Sole Proprietorship propiedad unipersonal 41. Stockholders accionistas

27. Owner propietario, dueno

42. Stocks valores

28. Partners socios

43. Subsidiaries subsidiarias

29. Partnership sociedad

44. Turnover monto de las transacciQnes comerciales

30. Preferred preferenciales 31. Primary primaria, basica

45. Undertaking empresa

32. Profit utilidad

46. Unlimited ilimitadas

33. Provisions disposiciones, provisiones

REFERENCES_ Castro de Bravo, Bertha (s/ref) Technical English for Business, Mexico, Mc Graw Hill. Eisen, Peter J. (1995) Accounting: The Easy Way, 3a. Ed. New York, Barron's, Weygandt, Jerry J. y otros (2000) Financial Accounting, New York, John Wiley & Sons, Inc.

GOOD WORK: Continue studying and you'll get your goals. Ifs easier than what you expect. You've already finished Unit 1. Congratulations!

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