LEARNING ACTIVITY # 15

TITLE

Evidence 5:

Summary Export import theory

Presented By:

Wilson Omar Rodríguez Orjuela

Program:
Logistics Management
Program1565258 virtual

March – 2019
 Actividad de aprendizaje 15

Evidencia 5: Summary “Export-import theory”

Contar con los conocimientos necesarios para realizar un proceso de exportación,

requiere no solo de manejar habilidades lectoras para apropiar las normas y pasos
a seguir, sino también comprender y extraer los aspectos más importantes de
cada texto. Existen gran cantidad de textos referentes exportación e importación
en inglés, por lo cual es necesario fortalecer las competencias en dicha lengua.

Para reforzar lo mencionado, realice las siguientes actividades:

1. Lea el siguiente texto:

Export-Import Theory1
Setting up the business
Whether it is a new or existing export-import business, the legal form,
or structure, will determine how the business is to be conducted, its
tax liability, and other important considerations. Each form of
business organization has its own advantages and disadvantages,
and the entrepreneur has to select the one that best fulfills the goals
of the entrepreneur and the business. Selection of an appropriate
business organization is a task that requires accounting and legal
expertise and should be done with the advice of a competent attorney
or accountant.

Ownership structure
In this section, we examine different forms of business organizations:
sole proprietorships, partnerships, corporations, and limited liability
companies.

1 Belay, S. (2009). Export-Import Theory, Practices, and Procedures. (2a ed.). New York: Routledge.
Sole proprietorships

A sole proprietorship is a firm owned and operated by one individual.

No separate legal entity exists. There is one principal in the business
who has total control over all export-import operations and who can
make decisions without consulting anyone. The major advantages of
sole proprietorships are as follows:

1. They are easy to organize and simple to control. Establishing an

export-import business as sole proprietorship is simple and
inexpensive and requires little or no government approval. At the
state level, registration of the business name is required, while at the
federal level, sole proprietors need to keep accurate accounting
records and attach a profit or loss statement for the business when
filing individual tax returns (Schedule C, Internal Revenue Service
Form 1040). They must operate on a calendar year and can use the
cash or accrual method of accounting.

2. They are more flexible to manage than partnerships or

corporations. The owner makes all operational and management
decisions concerning the business. The owner can remove money or
other assets of the business without legal or tax consequences. He or
she can also easily transfer or terminate the business.

3. Sole proprietorships are subject to minimal government regulations

versus other business concerns.
4. The owner of a sole proprietorship is taxed as an individual, at a
rate lower than the corporate income tax rate. Losses from the export
import business can be applied by the owner to offset taxable income
from other sources. Sole proprietors are also allowed to establish tax
exempt retirement accounts. (Harper, 1991; Cheeseman, 2006a)
The major disadvantage of running an export-import concern as a
sole proprietorship is the risk of unlimited liability. The owner is
personally liable for the debts and other liabilities of the business.
Insurance can be bought to protect against these liabilities; however,
if insurance protection is not sufficient to cover legal liability for
defective products or debts, judgment creditors’ next recourse is the
personal assets of the owner. Another disadvantage is that the
proprietor’s access to capital is limited to personal funds plus any
loans that can be obtained. In addition, very few individuals have all
the necessary skills to run an export-import business, and the owner
may lack certain skills. The business may also terminate upon the
death or disability of the owner.

Establishing an appropriate business organization: pointers

 Does the entrepreneur intend to be the sole owner of the export-

import business? If not, how many people have an ownership
interest?
R/ if the employer is the only owner

 Does the entrepreneur need additional capital and/or expertise?

R/ the owner's access to capital is limited to personal funds plus
any loan that can be obtained.
  What legal form provides the greatest flexibility for management?
R/ The owner of an individually owned company is taxed as an
individual, at a rate lower than the corporate income tax rate

 What legal form affords the most advantageous tax treatment for
the business concern and individual entrepreneurs?
R/ the business when filing individual tax returns (Schedule C, Form 1040
Internal Revenue Service)

 Which legal structure is easy and less expensive to establish and

subject to a low degree of government regulation?
R/ Unique owners

 How important is it to limit personal liability of owners?

R/ legal liability for defective products or debts, the next resort of
judgment creditors is the personal assets of the owner

o Which legal structure is the most appropriate in light of the goals

and objectives of the export-import business? (Belay, 2009).
o R/ Sole proprietors can also establish tax-exempt retirement
accounts

2. Elabore una lista de vocabulario sobre el texto, mínimo de 15 palabras y escriba

su respectivo significado en inglés.

Liability: compliance with obligations

Liabilities: That remains inactive allowing things to happen without their
intervention.
 Proprietorship: Fact or circumstance of possessing a certain thing and being
able to dispose of it within legal limits.
Offset: Counteract or balance the effects of one thing with another contrary.
Taxable: What can or should be taxed with a tax or tribute.
Unlimited: That has no limits or is unknown.
Appropriate: Which is convenient or appropriate for the purpose for which it is
intended.
Establishing: Found, institute
Accurate: Which is rigorously adjusted, accurate or faithful
Management: Action to administer (govern, organize an economy).
Concerns: State of restlessness, restlessness or fear produced in the face of a
difficult situation, a problem, etc.
Disadvantage: Circumstance of being worse or being in a worse situation one
thing with respect to others of the same nature with which it is compared.
Running: To walk very fast and with impulse, so that between each step the two
feet remain in the air
Skills: The ability to communicate effectively
Establishing: Found, institute, make stable.

3. El texto sugerido al inicio de esta evidencia cuenta con varios párrafos, y al

interior de cada párrafo se encuentran varias ideas principales. Por favor, lea el
material complementario “Identifying the main idea” para conocer cómo se
puede encontrar la idea principal en un párrafo escrito en inglés.

• A business configuration
• She knows all about the proper trade
• Normally the company meets the appropriate requirements
• It must always be structurally conformed
• She knows the organization
• You must always know the minimum governmental regulations
• He knows the advantages and disadvantages of the unique Owner
• He does not know the risk of unlimited liability.
• Know the main disadvantage?
• He is making an export to Chile.
• I am filling commercial documents.

4. Luego de analizar el material complementario, por favor escriba las ideas

principales de cada párrafo, en presente simple, en inglés. No haga
transcripción literal de los párrafos. A continuación, transforme la oración a
presente progresivo, también en inglés.
 Simple Present Tense Present Progressive Tense
She knows all about the proper trade She is knowing all about the proper
trade
She knows the organization She is knowing the organization
He knows the advantages and He is knowing the advantages and
disadvantages of the unique Owner disadvantages of the unique Owner
He does not know the risk of unlimited He is does not knowing the risk of
liability unlimited liability
He makes an export to Chile He is making an export to Chile
I fill commercial documents I am filling commercial documents

5. Organice las ideas en un solo resumen, de manera que se conecten

coherentemente, en 15 líneas.

To carry out a business configuration it is very important that the commercial

organization is appropriate and structured for its new or already established
creation, meets all the required requirements, taking into account the structuring
of the property and the commercial organization. Where there is an organization
and above all the minimum governmental regulations, where for an owner either
alone or in society, it knows all the guarantees in front of other commercial
concerns of a single owner of a company and the main disadvantage of
executing an export and import concern as the sole owner is the risk of unlimited
liability. Showing the advantages and disadvantages compared to other types of
commercial organizations