Sole Proprietorship

A sole proprietorship is a business owned and usually operated by a single individual. Its major characteristic is that the owner and the business are one and the same. In other words, the revenues, expenses, assets and liabilities of the sole proprietorship are the revenues, expenses, assets, liabilities of the owner. A sole proprietorship is the easiest form of business to organize. The only legal requirements for starting such a business are a municipal license to operate a business and a registration license to ensure that two firms do not use the same name. A sole proprietorship can be dissolved as easily as it can be started. A proprietorship has a limited life, being terminated on the death, bankruptcy, insanity, imprisonment, retirement, or whim of the owner.A sole proprietorship offers the owner freedom and flexibility in making decisions. The owner has absolute control over the use of the company's resources. The owner is legally liable for all debts of the company. If the assets of the firm cannot cover all the liabilities, the sole proprietor must pay these debts from his or her own pocket. A sole proprietorship dependent on its size and provision for succession.PartnershipsA partnership is an unincorporated enterprise owned by two or more individuals. A partnership agreement, oral or written, expresses the rights and obligations of each partner. There are three types of partnerships: general partnerships, limited partnerships, and joint ventures. The most common form is the general partnership. Partnerships, like sole proprietorships, are easy to start up. Registration details usually entail obtaining a license and registering the company name. Complementary management skills are a major advantage of partnerships. Consequently partnerships are stronger entity and can attract new employees more easily than proprietorships. The stronger entity also makes it easier for partnerships to raise additional capital. The major disadvantage of partnerships is that partners, like sole proprietors, are legally liable for all debts of the firm. In partnerships, the unlimited liability is both joint and personal. Partners are also legally responsible for actions of other partners. Partnerships are not as easy to dissolve as sole proprietorships.Limited companiesLimited companies are created by law and are separate from the people who own and manage them. Limited companies are also referred to as corporations. In limited companies, ownership is represented by shares of stock. The owners, at an annual meeting, elect a board of directors which has the responsibility of appointing company officers and setting the enterprise's objectives.Limited companies are the least risky from an owner's point of view. Corporations can raise larger amounts of capital than proprietorships or partnerships through the addition of new investors or through better borrowing power. Limited companies do not end with the death of owners.It is more expensive and complicated to establish corporations. A charter, which requires the services of a lawyer, must be obtained through provincial governments or the federal government. Limited companies are subject to federal and provincial income taxes. Dividends to shareholders are also taxed on an individual basis. Corporations do not enjoy the secrecy. A company must send each shareholder an annual report detailing the financial condition of the firm.

TOPIC 7. COMPANY STRUCTURE

TEXT 1

Most organizations have a hierarchical or pyramidal structure,with one person or a group of people at the top, and an increasing number of people below them at each successive level. There is a clear

line or chain of command running down the pyramid. Yet the activities of most companies are too complicated to be organized in a single hierarchy. Most large manufacturing organizations have a functional structure, including production, finance, marketing, sales, and personnel or staff departments. Functional organization is efficient, but there are two standard criticisms. Firstly, people are usually more concerned with the success of their department than that of the company.

An inherent problem of hierarchies is that people at lower levels are unable to make important decisions, but have to pass on responsibility to their boss. One solution to this is matrix management, in

which people report to more than one superior.

Management is the effective and efficient integration and coordination of resources to achieve desired objectives. A manager integrates and combines human, capital, and technological resources in the best way possible to ensure that the company’s objectives are achieved.It is common knowledge that managers have to perform several functions: planning, organizing, staffing, directing, and controlling.

Planning – is connected with decisions about what to produce, how to finance your business, where to market the goods or services, and what resources to use.

Organizing – is concerned with establishing relationships among tasks, activities, and people in the company. Staffing - to hire the best employees and how to get rid of those who can’t work efficiently.As for directing, this function is about guiding and motivating employees to accomplish the company’s objectives.

And lastly comes controlling which means monitoring and evaluating the company’s performance. There are three basic skills that managers should have to perform their tasks. They are technical job skills, human relations skills, and analytical skills. Let me tell you about each of them in turn.First, technical skills; they are connected with the manager’s ability to understand and use the specific tools, knowledge, and techniques in their work. Second, human relations skills, which are about socializing with your subordinates, motivating and directing them in order to improve performance. And third, analytical skills, that relate to understanding the whole organization, analysing and evaluating information, and making appropriate plans and decisions.

Money and banking

Money is used for buying or selling goods, for measuring value and for storing wealth. Almost every society now has a money economy based on coins and paper notes. . In primitive societies a system of barter was used. Barter was a system of direct exchange of goods.

A coin is a piece of metal, usually disk-shaped, which bears lettering, showing its value. Modern coins are based on face value, the value that governments choose to give them, irrespective of the actual metal content.Coin were portable, durable, recognizable and divisible into larger and smaller units of value.

Most governments now issue paper money in the form of notes. Paper money is obviously easier to handle and much more convenient in the modern world. Cheques, bankers’ cards, and credit cards are being used increasingly and it is possible to imagine a world where ‘money’ in the form of coins and paper currency will no longer be used.

Money serves as a medium of exchange, a unit of account, and a sore of value.

A medium of exchange is anything generally acceptable as a means of payment in the exchange of goods and services, in repaying debts, and in the exchange of assets.

The second function of money is to serve as a unit of account. A unit of account is a yardstick for measuring prices and values .

A store of value is a reservoir of future purchasing power. Money is both a temporary and a permanent store of purchasing power. The function of money as a temporary store of purchasing power is a result of its functions as a medium of exchange.

Banks' activities can be divided into retail banking, dealing directly with individuals and small businesses; business banking, providing services to mid-market business; corporate banking, directed at large business entities; private banking, providing wealth management services to high net worth individuals and families; and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profit organizations.

SERVISES: deposit account ? bank transfer, credit card, withdrawals(снятие денег), mortgages(ипотека), loans , exchange, pension save,

Labour market. Business is an increasingly important activity throughout the world today. There are now five broad fields or areas of business that offer exciting careers: management, marketing, accounting, finance and data processing.

A job is a specific task performed for an organization. A career has a long-term perspective and includes a series of jobs. Moreover, to understand careers we must look not only at people’s work histories or resumes but also at their attitudes toward their work.

Individual career planning normally entails five steps—self-assessment, exploring opportunities, making decisions and setting goals, action planning, and follow-up.

Productivity satisfaction, retention, and commitment of valued employees, stress reduction, and a flexible work force will help the organization remain competitive in the global economy.

A labor market is an economic system based on the voluntary exchange of labor for income and benefits. Labor markets are generally based on competition among workers for the best jobs and among employers for the best workers.

In a competitive labor market, the needs of the two customers may conflict. Workers want greater pay, benefits, and job security. Employers want to pay lower wages and provide fewer benefits and less security to workers. Historically jobs concentrated in cities. Today jobs increasingly locate in the suburbs and even provincial towns.

Modern labor markets are complex and constantly changing.

Some particular features of the current labor market should be taken into account:

►1) Understanding the regional nature of labor markets

►2) The ever-increasing demand for workers with higher skills is very important. to produce it.

►3) Income-support mechanisms and the unemployment insurance system provide low-income individuals with some assistance.

►4) More financial resources should be spent on training and retraining of workers who are long-term unemployed.

►5)A tremendous amount of information circulates through the labor market.

Advertising

3 principal types of advertising should be pointed out:

ƒ image-making advertising (or soft selling),

ƒ stimulating advertising (or hard selling),

ƒ advertising of stability (or reminder advertising).

Image-making advertising (soft selling)

The first aim of this type is to acquaint potential customers with the product, its destination and characteristics, to claim product’s relevance to consumers and its significant difference from

competing products. Image-making ad is designed to build strong brand image and create a propitious attitude, recognition and awareness to the company or the product. (like me-slogan)

The most effective means of image-making advertising are trailers on TV; print advertising in popular magazines and newspapers; participation in charity actions and its covering in mass media; outdoor advertising which can be subdivided into 7 types.

1. Billboard advertising 2. Consoles advertising. 3. Necessary attribute of any kind of business, signboards are the face of any company, enterprise, shop, drugstore, etc. 4. Roadside Stoppers

5. Citylights 6. Over-road banners. 7. Transport advertising (motor transport and public transport

Stimulator advertising (hard selling)

As it goes from the appellation, this type of advertising makes for motivating customers to buy the concrete product of the concrete company as well as sale stimulating and acceleration of commodity circulation. “Buy Me!” slogan.

The most effective means of hard selling are:

ƒ recurrent ads in newspapers and magazines, that are popular among the potential customers;ƒ direct mail; radio advertising; participation in exhibitions; TV advertising.

Advertising of stability (reminder advertising)

Even if the company gets sales going and its brand is recognized, it’s necessary to keep product in public eye and from time to time to consolidate the achievements by advertising. Advertising of stability doesn’t rely on any specific type of appeal, its only objective is to keep the brand name in the mind of the consumers by means of hidden advertising in the form of articles about the company’s activity and products; participation in exhibitions; direct mail of prospects (reports) about the annual activity of the company to the constant partners.

Marketing Buying, selling, market research, transportation, storage, advertising - these are all parts of the complex area of business known as marketing. In simple terms, marketing means the movement of goods and services from a manufacturer to a customer in order to satisfy the customer and to achieve the company's objectives.

Marketing can be divided into four main elements that are popularly known as the four P's: product, price, placement and promotion. The product element of marketing refers to the goods or service that a company wants to sell.

A company next considers the price to charge for its product. There are three pricing options the company may take: above, with, or below the prices that its competitors are charging. Most companies price with the market and sell their goods and services for average prices established by major producers in the industry. The producers who establish these prices are known as price leaders.

The third element of the marketing process - placement - involves getting the product to the customer through the channels of distribution. A common channel of distribution is: manufacturer – wholesaler – retailer – customer.

Wholesalers generally sell large quantities of products to a retailer and retailers usually sell smaller quantities to customers.

Finally, communication about the product takes place between buyer and seller. This communication between buyer and seller is known as promotion. There are different ways of promotion: personal selling, in a department store; through a newspaper or magazine and Internet.

Date: 2016-03-03; view: 1582