Finance English practice: Unit 5 — Company Law 1

Biz English

Apr 14, 2016

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Complete the sentences below. Use the key words if necessary.
- Partnerships
  
  key word
  partnership      ○      risks and profits      ○      debts      ○      legal entities      ○      sole trader
  
  A is a business arrangement in which several people work together, and share the . In Britain and the US, partnerships do not have limited liability for , so the partners are fully liable or responsible for any debts the business has. Furthermore, partnerships are not , so in case of a legal action, it is the individual partners and not the partnership that is taken to court. In most continental European countries there are various kinds of partnership which are legal entities.
  
  A business ̶ an enterprise owned and operated by a single person ̶ also has unlimited liability for debts.
  
  Limited liability
  
  key words
  company      ○      legal      ○      limited liability      ○      liable      ○      limited companies      ○      share capital      ○      directors      ○      executive directors      ○      corporate governance      ○      chairman      ○      non-executive directors      ○      board of directors      ○      objective      ○      audit committee
  
  A is a business that is a legal entity. In other words, it has a separate existence from its owners, the shareholders. It can enter into contracts, and can be sued or taken to court if it breaks a contract. Most companies have , which means that the owners are not fully for — or responsible for — the business's debts. These companies are known as . Their liability is limited to the value of their : the amount of cash that the shareholders have contributed to the company. This limitation of liability encourages investors to risk their money to become part owners of companies, while leaving the management of these companies to qualified managers and senior managers, known as .
  
  These managers and full-time run the company for its owners. There are standard procedures of — the way a company is run by the management for the shareholders, and how the managers are accountable to the shareholders. These include separating the job of from that of managing director, and having several on the who do not work full ̶time for the company but can offer it expert advice. Non-executive directors are often more : less influenced by their opinions and beliefs. There is also an , containing several non-executive directors, to which the auditors report.
  
  Founding companies
  
  key words
  found      ○      draw up      ○      Articles of Association      ○      Memorandum of Association      ○      registered office      ○      purpose      ○      authorized share capital
  
  When people or start companies, they or prepare and a .
  The Articles of Association state:
  the rights and duties of the shareholders and directors;
  the relationships among different classes of shareholder;
  the relationships between shareholders and the company and its directors.
  
  The Memorandum of Association states:
  the company's name;
  the location of the company's — where to send official documents;
  the company's — its aims or objectives;
  the — the maximum share capital it can have.
Britain English or American English?
- chairman
  - British English
  - American English
- president
  - American English
  - British English
- managing director
  - British English
  - American English
- chief executive officer (CEO)
  - American English
  - British English
- Articles of Association
  - American English
  - British English
- Bylaws
  - American English
  - British English
- Memorandum of Association
  - British English
  - American English
- Certificate of Incorporation
  - American English
  - British English
Are the following statements true or false?
- 1. In case of a legal dispute, people can take a company's shareholders to court. clue
  — A company has a separate legal existence from its owners, the shareholders.
  - false
  - true
- 2. The owners of limited companies have to pay all the company's debts. clue
  — The owners are not fully liable for – or responsible for – the business’s debts. They liability is limited to the value of their share capital.
  - true
  - false
- 3. Many companies are not owned by their managers. clue
  — Managers and executive directors run the company for its owners.
  - true
  - false
- 4. External directors can usually give more objective advice than full-time directors. clue
  — Non-executive directors are often more objective.
  - true
  - false
- 5. Partners in Britain and American business are not liable for the partnership's debts. clue
  — Partners are fully liable or responsible for any debts the business has.
  - true
  - false
- 6. In case of a dispute, people can take British companies and partnerships to court. clue
  — Partnerships are not legal entities, so in case of a legal action, it is the individuals partners and not the partnership that is taken to court.
  - true
  - false
Match the definitions to the word combinations below.
- . . .
  Audit committee
  : a group of directors to whom the external auditors present their report.
  - Non-executive directors
  - Audit committee
  - Corporate governance
  - Share capital
  - Limited liability
- . . .
  Non-executive directors
  : members of a board of directors who are not full ̶time managers of the company.
  - Share capital
  - Corporate governance
  - Audit committee
  - Limited liability
  - Non ̶executive directors
- . . .
  Share capital
  : owners' money invested in a company.
  - Corporate governance
  - Limited liability
  - Audit committee
  - Share capital
  - Non ̶executive directors
- . . .
  Limited liability
  : responsibility for debts up to the value of the company's share capital.
  - Share capital
  - Non ̶executive directors
  - Audit committee
  - Corporate governance
  - Limited liability
- . . .
  Corporate governance
  : the way a company is managed for its owners.
  - Share capital
  - Audit committee
  - Corporate governance
  - Limited liability
  - Non ̶executive directors
Complete the document. Use the words from the box.
- box
  Memorandum ○ registered office ○ purpose ○ authorized share capital
  
  of Association
- 1. The name of the Company is Language Services Pty Limited.
- 2. The of the Company will be in Australia.
- 3. The for which the Company is established is to provide translation and interpreting services to international companies.
- 4. The of the company is made up of ordinary shares divided into five thousand (5,000) shares of $1.00 par value each with one vote for each share.

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