INTRODUCTION  TO  COMPANY  LAW


The following text introduces the area of company law. Complete the text by using the words in the
box below.


            agreements   borrow   corporations   court   debts   dividends   employees

     legal   legislation   liability   limited   objectives   partnership   profits   property

                       registered (2x)    shareholders    sole trader    sue



A company is a …………………. entity, allowed by ……………………….., which permits a group of people, as
………………………to create an organization, which can then focus on pursuing set ………………… . It is empowered
with legal rights which are usually reserved only for individuals, such as the right to …………. and
be sued, own …………………., hire ……………………. or loan and ………………… money. The primary advantage of a company
structure is that it provides the shareholders with a right to participate in the ……………………….., a
proportionate distribution of profits made in the form of a money payment to shareholders, without
any personal ………………… .

There are various forms of legal business entities ranging from the …………………….., who alone bears the
risks and responsibility of running a business, taking the profits, but as such not forming any
association in law and thus not regulated by special rules of law, to the …………………………. company with
………………….liability and to multinational ………………………. .

In a ………………………, members „associate“, forming collectively an association in which they all
participate in management and sharing …………………., bearing the liability for the firm´s ………………… and
being sued jointly and severally in relation to the firm´s contracts or tortious acts.

Limited-liability companies, or corporations, unlike partnerships, are formed not simply by
………………………. entered into between their first members; they must also be ……………………… at a public office
or ………………….. designated by law or otherwise obtain official acknowledgement of their existence.


In: Nick Brieger: Test Your Professional English. Law.Penguin English Guides. 2002. p.58