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3. Listen to the speaker; read and memorize the following words and phrases:

1. partnership - компания, товарищество

2. common law - общее право

3. civil law - гражданское право

4. to be entitled - иметь право

5. to provide - предусматривать

6. dormant partner - пассивный партнер

7. to be liable for smb’s debts - нести ответственность за чьи-либо долги

8. obligations - обязательство

9. incur - нести, навлекать на себя что-либо

10. to invisage [in`vizi®] - рассматривать

11. shareholder - акционер

12. board of directors - правление директоров

13. regime [rei`¥i:m] - зд. система правления

14. managing director - директор-распорядитель

15. to authorize - уполномачивать

16. to appoint - назначать

17. general supervision - общий надзор

18. issue - выпуск

19. share - акция

20. bond - облигация

21. borrowing - заем

22. executing officer - управляющий делами

23. treasurer - амер. заведующий

24. to confide to - поручать кому-либо

25. remuneration - оплата, заработная плата

26. to dismiss - увольнять

27. to vest powers - наделять полномочиями

Text. Management and Control of Companies

The simplest form of management is the partnership. In Anglo-American common-law and European civil-law countries, every partner is entitled to take part in the management of the firm's business, unless he is a limited partner; however, a partnership agreement may provide that an ordinary partner shall not participate in management, in which case he is a dormant partner but is still personally liable for the debts and obligations incurred by the other managing partners.

The management structure of companies or corporations is more complex. The simplest is that envisaged by English, Belgian, Italian, and Scandinavian law, by which the shareholders of the company periodically elect a board of directors who collectively manage the company's affairs and reach decisions by a majority vote. Under this regime it is common for a managing director (directeur général, direttore generale) to be appointed, often with one or more assistant managing directors, and for the board of directors to authorize them to enter into all transactions needed for carrying on the company's business, subject only to the general supervision of the board and to its approval of particularly important measures, such as issuing shares or bonds or borrowing. The U.S. system is a development of this basic pattern. By the laws of most states it is obligatory for the board of directors elected periodically by the shareholders to appoint certain executive officers, such as the president, vice president, treasurer, and secretary. The latter two have no management powers and fulfill the administrative functions that in an English company are the concern of its secretary; but the president and in his absence the vice president have by law or by delegation from the board of directors the same full powers of day-to-day management as are exercised in practice by an English managing director.

The most complex management structures are those provided for public companies under German and French law. The management of private companies under these systems is confided to one or more managers (gérants, Geschäftsführer) who have the same powers as managing directors. In the case of public companies, however, German law imposes a two-tier structure, the lower tier consisting of a supervisory committee (Aufsichtsrat) whose members are elected periodically by the shareholders and the employees of the company in the proportion of two-thirds shareholder representatives and one-third employee representatives (except in the case of mining and steel companies where shareholders and employees are equally represented) and the upper tier consisting of a management board (Vorstand) comprising one or more persons appointed by the supervisory committee but not from its own number. The affairs of the company are managed by the management board, subject to the supervision of the supervisory committee, to which it must report periodically and which can at any time require information or explanations. The supervisory committee is forbidden to undertake the management of the company itself, but the company's constitution may require its approval for particular transactions, such as borrowing or the establishment of branches overseas, and by law it is the supervisory committee that fixes the remuneration of the managers and has power to dismiss them.

The French management structure for public companies offers two alternatives. Unless the company's constitution otherwise provides, the shareholders periodically elect a board of directors (conseil d'administration), which "is vested with the widest powers to act on behalf of the company" but which is also required to elect a president from its members who "undertakes on his own responsibility the general management of the company," so that in fact the board of directors' functions are reduced to supervising him. The similarity to the German pattern is obvious.

Dutch and Italian public companies tend to follow the German pattern of management, although it is not expressly sanctioned by the law of those countries. The Dutch commissarissen and the Italian sindaci, appointed by the shareholders, have taken over the task of supervising the directors and reporting on the wisdom and efficiency of their management to the shareholders.

II. Exercises on the Text:

4. Give Russian equivalents to:

every partner is entitled to take part in; a partnership agreement may provide; he is a dormant partner; personally liable for debs and obligations; who collectively manage the company’s affairs; by a majority vote; under this regime; to enter into all transactions; approval of particular important measures; issuing shares or bonds; by the law of most states; to appoint certain executive officers; to fulfill the administrative functions; the same full powers of day-to-day management;

the management of private companies; in the case of public companies; a two-tier structure; supervisory committee; two-third shareholder representatives and employees; the affairs of the company; which can require information or explanations; to forbid to undertake the management; approval for particular transactions; establishment of branches overseas; to fix remuneration ; to offer two alternatives; on behalt of the company; the similarity is obvious; it is not expressly sanctioned by the law; reporting on the wisdom and efficiency.

5. Ask questions for these answers (work in pairs):

1. Every partner is entitled to take part in the management of the firm’s business.

2. The management structure of companies or corporations is more complex.

3. The company periodically elects a board of directors.

4. They reach decisions by a majority vote.

5. Particularly important measures are issuing shares or bonds or borrowing.

6. Yes, it is. The U.S. system is a development of this basic pattern.

7. The board of directors appoints certain executive officers.

8. The treasurer and secretary fulfill the administrative functions.

9. The most complex management structures are in Germany and France.

10. It is confided to one or more managers.

11. German law imposes a two-tier structure in the case of public companies.

12. The affairs of the company are managed by the management board.

13. It must report to the supervisory committee.

14. The supervisory committee is forbidden to undertake the management of the company itself.

15. It fixes the remuneration of the managers.

16. The French management structure offers two alternatives.

17. Yes, it is. A board of directors «is vested with the widest powers to act on behalt of the company».

18. The board of director’s functions are reduced to supervising the company.

19. They have taken over the task of supervising the directors.

6. Read, translate and analyze the scheme: