la z
Answer key
company [Link]
mandatorylevelsof equity- asin thecaseof the
Engtish
limitedcompany - aregoodnewsfor
PaEe5 butmakelifemoreriskyforcreditors.
entrepreneurs
5tarter
Thisis a particutar
probtemforyoungcompanies but
Articlesof association/ articlesof incorporation onehasto havesomeunderstanding fora bankin this
seeDidyou know?boxon page10 [Link]
oncea company is
[Link] newbank
Soletrader
- an loansagainst thecompany's nottheirpersonal
assets,
Soletrader-thesimplestformof business
individuat
oerson whoownsalltheassets of the assets,
businessandis liabteforattof itsdebts. 3 Part1
Equity/ Company capital 7 2007
z sellingJapanese goods(foodand ctothing)
Thelawsaysthatforlimitedcompanies a certain
amountofcashor assets mustbepaidin whenthe 3 furnitureand textites,becauseshe feelsthe
growthpotentiatin this sectoris greaterthan in
company Thelawdoesnotrequire
is formed. a
amountof equityforpartnerships. This the food and clothingsector
minimum
company capitalmustalwaysbeavaitable sothatthere 4 to offerthem a positionin the restructured
business
areat leastsomeassetsleftto satisfucreditorsifthe
company goesbankrupt. 5 to find out how to get morecapitaIin orderto
exoandthe business
Tangibleassets
Assetsis anotherwordfor property.
Therearedifferent "tp'3t-8,
categories andtangible
of assets, assetsarephysical 3 Part2
[Link], vehicles,
buildings, raw a office
[Link]
assets arenotphysical
objectsbut b orofits
theyhavea [Link],know-how,patents. c snare
Registerof companies d directors
(Companies House)attcorporationsmustbeentered e investor
contains keyinformation aboutthe f guarantee
[Link]
company [Link] andthe F8e9
addressof its headoffice,the namesof its directors,
thedateof itsformation,thekindof business it 51c 4f
conductsandthesizeof itssharecapital. This 20 5e
information canbeinspected byanymember of the 3a 6b
publicandis increasingly ontheInternet.
available
Unlimitedliability
[Link],
Thisprobtem existsforself-employed peopleandfor 6 r IHowdoesthis advicecomparewith yours?]
ordinary partnerships, Inthesecases thebusiness is Thisdependson jurisdiction. Somestudentsmay
nota separate legalentity. Thismeans thatliabitity discussthe possibilityof a partnershipinsteadof
restswiththeowner(s) of thecompany. lf thecompany a [Link] no wronganswers:the key
hasdebts,theowneris tiabteforthemandis not thingsare minimisingrisk (limitedtiabitity)and
altowed to limitthistiability- evenif it meanshim paperworkand maximising money-raising
[Link] corporation the oossibilities.
of a shareholder
liabitity is timited
to thevalueof the z IWhatphrasedoesDeborahuse...?]
shares heor sheholds. The phraseis debt /debt [Link]
mediadiscussthis as the ovoilobilityof [Link]
r 1 ony our ow n 6 separate
prosand consof debt financedependon the
z debts 7 shareholding
[Link] the banktend,and on what
3 personal 8 cash
terms?(interestrates,type ofsecurity,restrictions
4 agreement 9 publicty
ptacedon the runningofthe business, [Link]
5 Owners ownersmay not be ableto se[[[argeassets
pege7 withoutthe bank'sconsent).Sometimes thereare
tax advantagesfor a company,too.
2
Limited partnerships
liabitity areindeedbecoming 3 [WhatphrasedoesDeborahuse..?]
The phraseis equity/ equityfinance(the
morepopular amongsttawyers,accountantsand
canrunto millions
of euros. oppositeof debt,in questionz). The prosand
whosetiability
architects,
consdependon the economicclimateand the
thatthelawmaker
Thisis a balance [Link] healthof the business:you canonly raisemoney
mandatory levelsof equitycreate
confidencein a by sellingsharesif peoplewantto buy the shares.
88 | Answerkey
Also,sharesoftenhavevotesattachedto them. Disadvantages
Thenew sharehotders may be ableto influence - Thecompanyhas lessaccessto capital- a possible
decisionswhichthe businessownershavebeen problemif it wantedto embarkon a major
usedto makingon their own. Do the ownerswant investmentprogramme.
to giveup a measureof control? - Famityin-fightingcan makedecisionsmoredifficult.
4 Shesaysthis becausein the [Link] - Companylesswillingto bringin outsideexpertiseto
to producemoreofficiatpaperworkthan other freshenup its performance.
forms of business(soletrader andgeneral
partnership).Companiesneedto be registeredat b Thisis not uncommonin situationswhereit is verv
imoortantto movefast.
Companies Housein orderto do business, while
othersdo not (thisis differentelsewherein the Advantages
world).Theyalsoneedto file (sendin) annualsets - Thecompanyis alreadyregistered so the amountof
of accountsand to file formseverytime their time neededbeforeyou cancommencetradingis
membership and management [Link] law veryshort.
alsoimposesa highstandardof behaviouron - Timemightbe very [Link] situationin
directorsof companies, in contrastto partners whichyou want to manufacture and distributespin-
and [Link] not so closelv off articleslikeT-shirts,basecaps [Link]
regulated. articulatesomeissueof short-livedpopularinterest.
Yousimplyhaven'tgot the normalamountof time it
7 19 6b
takesto registera new company.
2e 7c - Thiskind of registration is tessexpensive, too.
3i 8h
4i 9t Disadvantages
5a 100 - A possibtedisadvantage is that someclaimsexist
againstthe companyyou [Link] couldbe a
8 r view/ thecommercial register
compticated matterto get out of liabitityfor such
z issuing / shares ctaims.
3 obtained / a certificate ofincorporation
- Because the companyis no [ongertrading,it is more
4 c ond u c/ tb u s i n e s s
difficuttto carryout due diligence.
5 reiect/ anapplication
5 drawup / a partnership agreement
7 raise/ capitat
8 debts/ incur
pags12
Page17
970 a ,f 1 Confidentiality 5 Leaveentitlement
2C 5a 2 Competition 6 Duties
30 6e 3 Durationof contract/ 7 Applicablelaw
page13 Termof employment 8 Severance
4 Absence
u r Firstof all 5 Firstty
2 Next Secondty pate 18
Z
3 Foltowing that 8 Thirdty 1i 6b
4 Lasofat tl 9 Finatty 2g 7 c
5 At first 8 d
pageq 4a 9 f
ci 10 h
1 3a Bankloansor profitsof business
b S m albl u s i n e s s r false 5 true
Two 2 true 6 Irue
d Yes 3 true 7 false
e Registration
[Link]
formalities. 4 fatse
Constitutional
documentsreouired
andmustbe
opento public.
Page 19
f Untimited
1 Soletrader/ Generatpartnership r [Link] saysthat other placesofwork are
z LimitedCompany/ LLP alwaysof a [Link]
decidehow longthe projectgroupwil[ meetin
14 a Therearesomeverylargecompaniesin Germany Lucerneor how longone particularemployee
that haveremainedprivatelimitedcompaniese.g. shouldhaveto [Link]'tsendthe
Bosch. sameemployeethereweekafterweek.
Advantages z [Link] clause3(z) compensation for
- Thecompanyis protectedfrom hostiletakeoverbids. overtimesotetyby paymentis possibleevenif it is
- Theshareholders areoftenprimarilymembersof an not [Link] can refusebut it
extendedfamityand will alwaysact to preservethe can'tdo this [Link] a managersimply
integrityand continuityof the company. saysthat he doesn'thavetime to discussthe
- Thecompanyis freeof the obtigations that would be matter,this is not reasonable.
imposedon a [argeplc,[Link]
reDorts.