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PRIVATE SECTOR

PRIVATE SECTOR. Resource Bank , p. 22/1. Define the following terms: private sector. unincorporated businesses. incorporated businesses. Incorporated/Unincorporated. Latin: corpus = body English : corpse = dead body Incorporated ~ “has a body” => has legal standing => can be sued, etc.

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PRIVATE SECTOR

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  1. PRIVATE SECTOR

  2. Resource Bank, p. 22/1 Define the following terms: • private sector. • unincorporated businesses. • incorporated businesses.

  3. Incorporated/Unincorporated Latin: corpus = body English: corpse = dead body Incorporated ~ “has a body” => has legal standing => can be sued, etc. E.g., Ltd., PLC Unincorporated: the opposite of the above E.g., Sole trader, partnership

  4. WHO DO YOU SUE, IF... ... the hairdresser (a sole trader) dyed your hair bright green (and you wanted brown)? ... you bought poisoned fish food from ProAqua PLC and all your fish died?

  5. Limited or unlimited liability? • A person's financial responsibility is limited to a fixed sum, usually the value of a person's investment in a company. A shareholder in such a company is not personally responsible for any of the debts of the company, other than for the value of his investment in that company. • The owner(s) are personally responsible with their own wealth/assets for any legal actions and debts the company may face.

  6. Finish the sentences: • The owners of incorporated businesses have _____ liability, because … (legal identity, owner, responsible) • The owners of unincorporated businesses have ____ liability, because … (legal identity, owner, responsible)

  7. 1. Find the following expressions in the table (p. 22) 2. Match them up with their definitions on your handout3. Fill in the blanks in exercise 3 (handout). • incentive • overdraft • limited liability • unlimited liability • takeover • dividend • share • Annual General Meeting (AGM) • deed of partnership • disclosure of accounts • Board of Directors

  8. Types of businesses (RB, p. 22) • What are the most important aspects to consider about different types of businesses?

  9. Answer these questions about business organisations: • Which are easier to set up, which are harder? Why? • Where is it the easiest to make decisions? • What can end a business? • Which businesses have unlimited liability? • Which have limited liability? • How is the Board of Directors formed? • What is the main difference between Ltds and Plcs? (Why are Ltds “private” and Plcs “public”?) • What kind of management problems can arise in the 4 types of business organisations?

  10. Make sentences with these words • Private limited companies, sell, shares, general public • Public limited companies, sell, shares, general public, stock exchange • Disclose accounts, shareholders, right to know

  11. Possible solution: • Private limited companies cannot sell their shares to the general public. • Public limited companies can sell their shares to the general public on the stock exchange • Plcs are obliged to disclose their accounts at the end of the financial year, because shareholders have a right to know how the company is doing.

  12. Resource Bank, p. 23/VFind the expression in the text that means: Give money Start a business One’s own wealth The company doesn’t have enough to pay back its debts Ask friends for money The opposite of profit The opposite of paid Contribute capital Go into business Form a company/ partnership/etc. Personal fortune The assets do not cover the debts Raise capital from friends Loss unpaid

  13. Answer the questions: Why should unlimited liability make doctors and lawyers act responsibly? Explain: “a partnership is not a legal entity separate from its owners.” How do private limited companies become public limited companies in Britain? How is this done in America? What happens if a limited company goes bankrupt?

  14. How does an Ltd. become a PLC? IPO = Initial Public Offering, flotation a company issuesshares to the public for the first time. Shares are sold at the stock exchange/market. To liquidate a company: to close a company and sell its assets (for cash)

  15. Public limited company v Public corporation • Look at the table on p. 21 and explain the difference between the two types of organisations.

  16. Write sentences (5-5) about both PLCs and public corporations. Use the following help: • own • control • ...’s source of capital ... • Profits / give • The purpose of a ... is to ...

  17. Some solutions:(Passive voice!) • A PLC is owned by shareholders, who are members of the general public. Public corporations are owned by the government, which is a representative of all citizens (i.e., the public). • Both are controlled by a chairman, elected by the owners. • In both types of organizations the source of capital is the owners (share capital/ gov. funding). • In both cases profits are given to the owners. • The purpose of a public corporation is to serve the public interest. A PLC’s aim is to make a profit. Both serve the interests of their owners.

  18. READING (RESOURCE BANK, P. 24)COMPLETE THE TABLETitle:

  19. Title:FORMING A LIMITED COMPANY

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