Unit 33

Forms of Business Organization in the USA

Read the text page 151 and complete the following table
FORM OF BUSINESS ORGANIZ. Sole proprietorships Partnerships Owner(s) / Way of founding Control over Resposibility / Other the business / liability features profit

Corporations

Compare
SOLE PROPRIETORSHIP PARTNERSHIP general p. b) limited p. CORPORATION*
a) a) b)

TRGOVAC POJEDINAC TRGOVAKO DRUTVO

(drutva osoba)
a) b)

javno trgovako drutvo komanditno drutvo

TRGOVAKO DRUTVO
(drutva kapitala)
a) b)

C-corporation S-corporation

dioniko drutvo d.d. (AG) d.o.o. (GmbH)

*Uniform Commercial Code (S-section / C-section) Zakon o trgovakim drutvima - ZTD

Study the following collocations. Turn nominal phrases into verbal phrases.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

formation of a business to form a business possibilities of growth and expansion financial responsibility responsibility for the losses, debts, etc. association of two or more persons as co-owners voluntary agreement of partners equal profit sharing combination and utilization of labour, capital, etc. transferability of shares professional management of a corporation

a) Find the nouns that collocate with the following verbs. b) Which of the 3 forms of business organization does each of them refer to? c) Write sentence examples.
1. 2. 3. 4. 5.

to enjoy... to incur... to share... to utilize... to carry on...

Find the words of opposite meaning antonyms.

1. 2. 3. 4.

a retail store individual ownership full liability an artificial person

KEY antonyms.
1. 2. 3. 4.

a retail store wholesale (veletrgovina) individual ownership partnership (trgovako drutvo) full liability limited liability (ograniena odgovornost) an artificial / legal / juristic person natural person (fizika osoba)

Read the following definition of a company and compare it with the definition of a corporation in your book, p. 151
A company * is a business association which has the character of a legal person, distinct from its officers and shareholders. This is significant, as it allows the company to own property in its own name, continue perpetually despite changes in ownership, and insulate the owners against personal liability. However, in some instances, for example when the company is used to perpetrate fraud..., the court may lift the corporate veil and subject the shareholders to personal liability.
* company = corporation in the USA

Make notes which will help you explain to an American business partner how Croatian Commercial Code (ZTD) defines the term: Javno trgovako drutvo
Pojam javnoga trgovakoga drutva lanaka 68 (1) Javno trgovako drutvo je trgovako drutvo u koje se udruuju dvije ili vie osoba zbog trajnog obavljanja djelatnosti pod zajednikom tvrtkom, a svaki lan drutva odgovara vjerovnicima drutva neogranieno solidarno cijelom svojom imovinom. (2) lan drutva moe biti svaka fizika ili pravna osoba.

Answer the following questions.

1. 2.

3. 4. 5.

Which forms of business organizations are there in the USA? Which criteria are normally taken into consideration when people consider formation of a new business? (5 criteria) Which are the examples of businesses that function as sole proprietorships? What are the adventages and disadventages of sole proprietorship? What is the main precondition for establishing a partnership?

Questions PART 2
6. What kind of equality is the basis for the functioning of a partnership? 7. What is the way to create a corporation? 8. What is the position of corporations in the USA considering the size or volume of business being done? 9. What are the main attributes of a corporation? 10. Which Croatian forms of business organizations are you familiar with?