PARTNERSHIPS

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A partnership is an association of two or more persons to carry on a business for profit. When the owners of the partnership have unlimited liability they are called general partners. If partners have limited liability they are "limited partners". There may be a silent partner as well - a person who is known to the public as a member of the firm but without authority in management. The reverse of the silent partner is the secret partner - a person who takes part in management but who is not known to the public.

Any business may have the form of the partnership, for example, in such professional fields as medicine, law, accounting, insurance and stockbrokerage. Limited partnerships are a common form of ownership in real estate, oil prospecting, quarrying industries, etc.

Partnerships have more advantages than sole proprietorships if one needs a big capital or diversified management. Like sole proprietorship they are easy to form and often get tax benefits from the government.

Partnerships have certain disadvantages too. One is unlimited liability. It means that each partner is responsible for all debts and is legally responsible for the whole business. Another disadvantage is that partners may disagree with each other.

Active Vocabulary

partnership партнерство

to carry on a business вести справу

profit прибуток

general partner спільний партнер (який несе повну юридичну

відповідальність за справу)

limited partner партнер з обмеженою юридичною відповідальністю

silent partner партнер без права голосу

secret partner секретний партнер (з правом голосу, але невідомий

громадськості як партнер)

law юриспруденція

insurance страхування

stockbrokerage біржове маклерство

real estate нерухомість

oil prospecting видобуток нафти

quarrying industries видобувні промисловості

advantage перевага

disadvantage недолік

to be legally responsible бути юридично відповідальним

Comprehension Questions

1. What is the difference between a general partnership and a limited partnership?

2. Is there any difference between a silent partner and a secret partner?

What is this difference?

3. In what professional fields are the partnerships found?

4. In what businesses is the partnership a common form?

5. What are the advantages of a partnership?

6. Discuss the disadvantages of a partnership. Would you prefer partnership or sole proprietorship for business? Give your reasons.

Vocabulary Practice

Exercise 1. Select the necessary word in the sentence.

1. Partnership very often receive ... from the government. 1 secret partner

2. Limited partnership is a common form of ownership in... 2 unlimited liability

3. Partnerships have many..., one is that they receive tax

benefits from the government. 3 real estate

4....are the partners with unlimited liability. 4 general partner

5....has the authority in management but he is not

known to public. 5 advantage

6. A secret partner takes part in... 6 profit

7. General partners have... 7 capital

8. One advantage of a partnership is that it offers a

multiple source of... 8 management

9. A partnership can bring much... to the partners. 9 tax benefits

Dialogue

(Two friends Susan and Maurice; are having supper in a restaurant)

Maurice Haven't seen you for a long time. What have you been busy with?

Susan I've been pretty busy. Do you know my friend Nora? I went into business with

her.

Maurice Really? How is it going on?

Susan Fine, thanks. We get along very well, and the shop is attracting more and more

customers.

Maurice It sounds well. How many partners are there in your business?

Susan There are two of us and I am very pleased about it. I've made a right choice.

Nora's background is in accounting. She is very good at keeping the books. Maurice And you?

Susan You know I always liked talking. I guess I am rather good with customers.

I enjoy selling things.

Maurice Well, it sounds interesting. I believe you don't run a risk in your business.

Susan We haven't had many problems, although I suppose all business can be risky.

As partners we are both liable.

Maurice Did you both put the same amount of money into your business? Do you mind

my asking?

Susan No, we didn't invest the same amount of capital. But I think we've combined

our resources very well. I think it's good for both of us.

Maurice It seems really so. That is one advantage of general partnership. You can

invest less capital than your partner - even no money at all. But you as a

partner can contribute important services or skills, sometimes just a name or a

reputation.

Susan Indeed.

Maurice How did you arrange to distribute profits and losses?

Susan We share them equally. We hope to be in business for a long time.

Maurice Nice for you. Now you seem to know a lot about business.

Susan Not everything yet but the subject becomes quite technical.

Maurice I am glad to hear it. It's time to go now. See you later. Bye.

Active Vocabulary

to be busy with займатися чим-небудь

to go into business займатися бізнесом

to get along well бути у добрих стосунках з ким-небудь

to attract customers приваблювати покупців

to make a right choice зробити правильний вибір

background досвід роботи

accounting бухгалтерський облік

to run a risk