TYPES OF BUSINESS ORGANISATION
Try to answer the questions below before you read the
text
1. What is a sole trader?
2. What is a partnership?
3. What are the advantages and disadvantages of holding
sole trader status?
4. What are the advantages and disadvantages of holding
partnership status?
5. What is a private limited company?
6. What is a public limited company?
7. What are advantages and disadvantages of holding
limited company status?
The economy can be divided into two sectors. The public
sector includes coal, steel, rail transport, health and
education. In the private sector, there are various types of
business organisations.There are sole traders, partnerships,
private limited companies and public limited companies.
SOLE TRADER /'sole proprietor'/ The type of business is one which is owned, run and
controlled by one person. It is very often found in retailing
/sprzedaż detaliczna/, and in direct services (such as
window- cleaning and interior decoration. The advantage
of this type of business unit is that the owner can be his own
boss and can keep all the profits. Moreover, he does not
need much capital to start the business and there are very
few legal requirements to follow /wymogi prawne, które
trzeba spełnić/ so it is cheap and quick to set up . However,
there are disadvantages. First, the sole trader is personally
and completely responsible for all the losses of the business.
There is no one to share the risk with him. Second, all tasks
(selling, invoicing, tax documentation) in the business must
be performed by the owner so skills and abilities are limited
to those of the owner. He may be good at selling but poor at
administration or accounting. Also, if he is ill or wants to to
go on holiday there is no one to replace him- and when he is
not working no money is coming. And if he wants to expand
the business /rozszerzyć działalność/ he seldom has
enough capital.
PARTNERSHIPS - A partnership, like a sole trader, has
unlimited liability but it is an arrangement in which there are
at least two but no more than twenty people. Partnership
arrangements are common among professions such as
architects, accountants, lawyers and management
consultants. One advantage of this type of business is that
more capital can be raised because more than one person
is investing in the business. Also, partners have more skills
and abilities from which the business can benefit. Work can
be divided up and if somebody is ill or on holiday others
may replace them. Moreover, they share the risks and losses
and reduce the risk of personal bankruptcy.
However, partners cannot enjoy a sole trader's independence.
There is a risk of argument and conflict between them as
decisions are reached by consultation between partners.
There are other types of partners. 'Sleeping partners'
contribute capital /wnoszą kapitał/ to the business, but do
not participate in its organization and management. Their
liability is limited to the amount of capital they contribute.
For very large organizations of modern industry and
commerce, the amount of capital needed and the potential
losses which might result from collapse are very large.
Unlimited liability is out of the question
Most small businesses that opt for /wybierają/ limited
company status become private limited companies rather
than public limited companies (PLCs). The main differences
between them are that:
 There is a restriction on the number of members in
a private limited company (maximum fifty)
 There are also restrictions on the transfer of
shares in a private limited company. Shareholders
/udziałowcy/ need a permission of other
shareholders if they want to sell their shares.
Private limited companies cannot sell their shares
on the stock exchange.
 PLCs can appeal /wzywa/ to the public
/społeczeństwo, ludzie/ to subscribe to new
shares /subskrybować, zapisywac sie na nowe
akcje/ and so can raise more capital than a private
limited company. The public buys shares and they
can sell their shares freely on the stock exchange.
Match the English words below with their Polish
equivalents from the list
Personal assets/sole trader/partnership/stock exchange/private
limited company/board meeting/ Annual General Meeting/ personal
liability/ business partner/ public limited company/sleeping
partner/business debts/ board of directors/company directors/
unlimited liability
spółka z ograniczoną odpwiedzialnością
Roczne Walne Zgromadzenie
majątek osobisty
zarząd
spółka z ograniczoną odpowiedzialnością notowana na giełdzie
spółka z ograniczoną odpowiedzialnością nieupoważniona do
sprzedawania swoich akcji na giełdzie
nieograniczona odpowiedzialność
długi firmowe
giełda papierów wartościowych
cichy wspólnik
firma jednoosobowa
wspólnik w interesach
dyrektorzy firmy
spotkanie zarządu
odpowiedzialność osobista