Reading Comprehension Read and translate the following text. Consult a dictionary if necessary. Business law

Business law deals with legal rules and principles of primary interest to the business community. Because of the complexity of modern business, the laws affecting businesses necessarily reach into diverse areas. Many of the laws are difficult and technical. Nevertheless, the person going into business or already in business should gain at least some familiarity with basic regulations and principles. Such basic knowledge of the law allows the business person to make intelligent decisions and to foresee problems that may actually require legal advice or assistance.

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Establishing a Business: Formats

Typically, the person going into business wants to be the sole owner of a particular enterprise. The simplicity of sole ownership, or sole proprietorship, is attractive.

The two main alternatives to sole proprietorship are the partnership and corporation. In the former, two or more persons work together in a business enterprise, often on the basis of a partnership agreement. Within a corporation (a separate legal entity) one or more persons can conduct business operations without taking responsibility for the debts of the business. Both the partnership and the corporation can take variant forms while maintaining a basic organizational pattern.

The Sole Proprietorship

Many states require that the person going into business as a sole proprietor register an assumed or fictitious business name under state laws. Specific information is usually required, including the business name and the names and addresses of all persons who have an interest in the business.

There are many advantages to creating a sole proprietorship. The owner can keep track of the business’ progress from month to month or year to year. He or she can control operating costs and can often avoid much of the paperwork required by other business arrangements. The sole proprietor remains the boss. If the business stays small, fulltime employees may not be needed.

Partnerships

A partnership is somewhat more complicated than the sole proprietorship but is less complex than the corporation. Formed, by two or more persons, the partnership is considered a business entity but not a tax entity. In other words, each partner must pay taxes on all partnership income. Each partner is responsible for the debts and credit arrangements contracted by any other partner. Thus, any member of the partnership can bind the business, and all its partners to business contracts and transactions.

The partnership agreement is sometimes informal – even oral. But ideally, partners should decide the terms of their agreements with the aid of a lawyer.

A partnership has many of the advantages of a sole proprietorship but may also face similar strictures or regulations. An assumed or fictitious name must be registered.

Generally, the various states levy no taxes on the right to function as a partnership or franchise. In addition, the partnership does not have to keep the general records required of a corporation. Unlike a corporation, which can stay in business indefinitely, a partnership usually dissolves on the death, retirement, or withdrawal of a partner.

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