В. А. Шляхова, О. Н. Герасина, Ю. А. Герасина английский язык для экономистов english for economists

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TEXT III
(
To be read after Unit IV
To be read after Unit IV
)
Прочтите текст и выполните последующие задания.
The Sole Proprietor
The sole proprietor is the oldest form of business organization. 
Even today, from the point of view of numbers, small firms 
predominate, but their total productive capacity is less important 
than companies. Such one-person firms range from the window-
cleaner, shopkeeper and builder who employs other workers and 
may even own many separate units. Nevertheless these businesses 
have the characteristic of being owned and controlled by a single 
person. This person decides the policy of the firm, and alone takes 
the profits or bears losses. In addition, the only accounts which 
have to be submitted are income-tax assessment. No corporation 
tax is payable.
However, the sole proprietor suffers from five main 
disadvantages.
First, such a firm can develop slowly, because sources of capital 
are limited. The success of the venture, especially in its early stages, 
depends mainly on the person in charge. The main source of capital 
is the owner’s savings together with such additional sums as can 
be borrowed from relatives, close friends, a bank.
Second, in the event of failure, the property of the proprietor 
can be claimed by creditors. In short, there is no limited liability.
Third, where profits are high, income tax paid on annual 
profits may be larger than a company’s corporation tax. This 
is because income may be taxed at a high marginal rate of tax, 
whereas corporation tax is only 20% if a company’s profits are 
less than $300,000. Less tax leaves more funds for investing in the 
business.
Fourth, it is more difficult to transfer part of a business than 
to transfer shares in a company.

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Fifth, on the retirement or death of the owner, a one-man firm 
stops its activity.
Because of these disadvantages, sole proprietors are mainly 
confined to businesses which are just setting up and also to certain 
industries, such as agriculture and repairing shops.

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