[00:00.100]This is the VOA Learning English Economics Report.
[00:04.530]Businesses are structured in different ways
[00:08.690]to meet different needs.
[00:10.980]The simplest form of business
[00:13.410]is called an individual or sole proprietorship.
[00:18.310]The proprietor owns all of the property of the business
[00:22.240]and is responsible for everything.
[00:25.690]For legal purposes, with this kind of business,
[00:29.370]the owner and the company are the same.
[00:33.610]This means the proprietor
[00:36.050]gets to keep all of the profits of the business,
[00:39.130]but must also pay any debts.
[00:42.220]Another kind of business is the partnership.
[00:46.150]Two or more people go into business together.
[00:50.690]An agreement is usually needed to decide
[00:54.920]how much of the partnership each person controls.
[00:59.610]One kind of partnership is called a limited liability partnership.
[01:06.030]These have full partners and limited partners.
[01:10.700]Limited partners may not share as much in the profits,
[01:15.880]but they also have less responsibility for the business.
[01:20.770]Doctors, lawyers and accountants often form partnerships
[01:26.090]to share their risks and profits.
[01:28.980]A husband and wife can form a business partnership together.
[01:33.610]Partnerships exist only for as long as the owners remain alive.
[01:40.480]The same is true of individual proprietorships.
[01:44.910]But corporations are designed to have an unlimited lifetime.
[01:51.090]A corporation is the most complex kind of business organization.
[01:57.070]Corporations can sell stock as a way to raise money.
[02:02.190]Stock represents shares of ownership in a company.
[02:07.120]Investors who buy stock can trade their shares
[02:11.050]or keep them as long as the company is in business.
[02:15.340]A company might use some of its earnings
[02:18.670]to pay dividends as a reward to shareholders.
[02:23.450]Or the company might reinvest the money back into the business.
[02:28.380]If shares lose value,
[02:30.470]investors can lose all of the money they paid for their stock.
[02:35.600]But shareholders are not responsible for the debts of the corporation.
[02:41.230]A corporation is recognized as an entity
[02:45.110]-- its own legal being, separate from its owners.
[02:50.090]A board of directors controls corporate policies.
[02:54.510]The directors appoint top company officers.
[02:58.400]The directors might or might not hold shares in the corporation.
[03:04.880]Corporations can have a few major shareholders.
[03:09.550]Or ownership can be spread among the general public.
[03:14.030]But not all corporations are traditional businesses
[03:18.610]that sell stock.
[03:19.860]Some nonprofit groups are also organized as corporations.
[03:25.560]And that's the VOA Learning English Economics Report,
[03:30.690]written by Mario Ritter.