Reading. Read the text carefully and do the tasks that follow

Read the text carefully and do the tasks that follow.

A business (also known as enterprise or firm) is an organization designed to provide goods or services. Although forms of business ownership vary greatly, there are several common types: the sole proprietor, the partnership, the joint stock company, the cooperative society, the public corporation, etc.

The sole proprietor is the simplest and the oldest form of business enterprise and is often referred to as the one-person business. A single person provides the capital, takes the decisions, and assumes the risks. He or she is responsible for the success or failure of the business, and has, therefore, the sole rights to profits.

The great disadvantage of the sole proprietor is that the owner is personally liable for the debts incurred by the firm and his liability is unlimited. All his personal possessions are at risk.

Partnerships are voluntary combinations of from 2 to 20 persons formed for the purpose of carrying on business with a view of profit. The motive, however, may not be financial. Partnerships are often formed in order to bring new ability and enterprise into the business. They are flexible organizations which allow a greater degree of specialization, but the liability of the partners is unlimited and they are fully liable for the acts of other partners.

The joint stock company consists of an association of people who contribute towards a joint stock of capital for the purpose of carrying on business with a view of profit. A change in membership or a transfer of stock has no effect on the existence of the company. Unlike partners in a partnership, a stockholder in a joint stock company has no agency relationship to the company or any of its members.

A cooperative is a business organization owned and operated by a group of individuals for their mutual benefit. They are limited liability businesses that can be for-profit or not-for-profit. Members often have a close association with the enterprise as producers or consumers of its products or services, or as its employees.

Choosing the right form of business ownership is important because the form of business you choose will determine how your business is organized, how the money that flows in and out of your business is handled, and how your business is taxed.