1. In your
opinion how important is each of the
following for showing a person’s status in an organization? Give each one a
score from 1. (not important) to 5 (very important):
( ) a reserved parking
space.
( ) having a secretary. ( ) an office window.
( ) a
uniform.
(
) the size of your desk.
( ) your own office.
( ) taking a holiday when you
like. ( ) flying business
class. ( ) a company credit card.
( ) a company car.
( )
having to clock in when you arrive.
2. Read the three descriptions of company
structures. Then answers the
questions.
Sole Trader: One person sets up and runs
the company. The person provides all the capital and has unlimited liability
for business debts, even if this means selling personal assets.
Limited Company: In a limited company the capital is
divided into shares, which are held by shareholders. Shareholders have limited
liability, but they can vote at the Annual General Meeting to elect the Board
of Directors.
There are two types of limited company.
(i) In a private limited company,
all shareholders must agree before shares can be bought or sold.
(ii) In a public limited company,
shares can be bought or sold freely, for example on the
stock exchange.
Partnership: A group of people provide the capital,
set up the company and manage
it together. There are two types of
partnership.
(i) Partners in an unlimited
partnership are like sole traders – if the business fails they are liable for
all the debts, and may even have to sell personal assets.
(ii) In a limited partnership there
can be sleeping partners who do not participate in the management of the
company. Sleeping partners have limited liability. In the event of bankruptcy,
they only lose their investment, not their personal assets.
QUESTIONS:
(A) What are the most people’s principal
personal assets?
(B) How can a sole trader get the capital
to set up a business?
(C) What are the advantages and
disadvantages of being a sleeping partner?
(D) What is the difference between a sleeping
partner and a shareholder?
(E) If a private limited company goes
bankrupt, do the shareholders lose their personal
assets?
(F) What are the advantages of a public
limited company?
ANSWERS
1. In your opinion how
important is each of the following for showing a person’s status in an
organization? Give each one a score from 1. (not important) to 5 (very
important):
( ) a reserved
parking space.
( ) having a
secretary. (
) an office window.
( ) a
uniform.
(
) the size of your desk.
( ) your own office.
( ) taking a holiday
when you like. ( ) flying
business class. ( ) a company credit card.
( ) a company car. ( ) your name on the door.
( ) having to clock in when you arrive.
2. Read
the three descriptions of company structures. Then answers the
questions.
(A) What are the most people’s principal personal
assets? A
house, a car etc.
(B) How can a sole trader get the capital to set up a
business? Sell
personal assets,
borrow money from a bank, family or
friends, crowd fund.
(C) What
are the advantages and disadvantages of being a sleeping partner? Sleeping partners
have limited liability. In the event of bankruptcy, they only lose their
investment, not their personal assets. If the company does well they have
returns without needing to work for them.
(D) What
is the difference between a sleeping partner and a shareholder? It’s easier for a
shareholder to sell their shares.
(E) If a private limited company goes bankrupt,
do the shareholders lose their personal
assets? No.
(F) What
are the advantages of a public limited company? Shares can be bought or
sold freely, for example on the stock exchange.
Thank you for this exercise
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