Actividad de aprendizaje 15

Evidencia 5: Summary “Export-import theory”

Contar con los conocimientos necesarios para realizar un proceso de exportación,

requiere no solo de manejar habilidades lectoras para apropiar las normas y pasos
a seguir, sino también comprender y extraer los aspectos más importantes de
cada texto. Existen gran cantidad de textos referentes exportación e importación
en inglés, por lo cual es necesario fortalecer las competencias en dicha lengua.

Para reforzar lo mencionado, realice las siguientes actividades:

1. Lea el siguiente texto:

Export-Import Theory1

Setting up the business

Whether it is a new or existing export-import business, the legal form, or

structure, will determine how the business is to be conducted, its tax liability,
and other important considerations. Each form of business organization has
its own advantages and disadvantages, and the entrepreneur has to select
the one that best fulfills the goals of the entrepreneur and the business.
Selection of an appropriate business organization is a task that requires
accounting and legal expertise and should be done with the advice of a
competent attorney or accountant.

Ownership structure

In this section, we examine different forms of business organizations: sole

proprietorships, partnerships, corporations, and limited liability companies.

1
Belay, S. (2009). Export-Import Theory, Practices, and Procedures. (2a ed.). New York: Routledge.
Sole proprietorships

A sole proprietorship is a firm owned and operated by one individual. No

separate legal entity exists. There is one principal in the business who has
total control over all export-import operations and who can make decisions
without consulting anyone. The major advantages of sole proprietorships
are as follows:

1. They are easy to organize and simple to control. Establishing an export-

import business as sole proprietorship is simple and inexpensive and
requires little or no government approval. At the state level, registration of
the business name is required, while at the federal level, sole proprietors
need to keep accurate accounting records and attach a profit or loss
statement for the business when filing individual tax returns (Schedule C,
Internal Revenue Service Form 1040). They must operate on a calendar
year and can use the cash or accrual method of accounting.

2. They are more flexible to manage than partnerships or corporations. The

owner makes all operational and management decisions concerning the
business. The owner can remove money or other assets of the business
without legal or tax consequences. He or she can also easily transfer or
terminate the business.

3. Sole proprietorships are subject to minimal government regulations

versus other business concerns.

4. The owner of a sole proprietorship is taxed as an individual, at a rate

lower than the corporate income tax rate. Losses from the export import
business can be applied by the owner to offset taxable income from other
sources. Sole proprietors are also allowed to establish tax exempt
retirement accounts. (Harper, 1991; Cheeseman, 2006a)
The major disadvantage of running an export-import concern as a sole
proprietorship is the risk of unlimited liability. The owner is personally liable
for the debts and other liabilities of the business. Insurance can be bought
to protect against these liabilities; however, if insurance protection is not
sufficient to cover legal liability for defective products or debts, judgment
creditors’ next recourse is the personal assets of the owner. Another
disadvantage is that the proprietor’s access to capital is limited to personal
funds plus any loans that can be obtained. In addition, very few individuals
have all the necessary skills to run an export-import business, and the
owner may lack certain skills. The business may also terminate upon the
death or disability of the owner.

Establishing an appropriate business organization: pointers

 Does the entrepreneur intend to be the sole owner of the export-import

business? If not, how many people have an ownership interest?

 Does the entrepreneur need additional capital and/or expertise?

 What legal form provides the greatest flexibility for management?

 What legal form affords the most advantageous tax treatment for the
business concern and individual entrepreneurs?

 Which legal structure is easy and less expensive to establish and subject
to a low degree of government regulation?

 How important is it to limit personal liability of owners?

 o Which legal structure is the most appropriate in light of the goals and
objectives of the export-import business? (Belay, 2009).

2. Elabore una lista de vocabulario sobre el texto, mínimo de 15 palabras y escriba

su respectivo significado en inglés.
________________________________________________________________
Tax liability: The amount of money someone owes to tax authorities, individuals
and businesses can have tax liabilities.
Entrepreneur: Person who sets up a business or many of them taking on
financial risks hoping for profit.
Sole proprietorship: It’s when only one person acquires all the benefits and
risks of running an enterprise, it is the most common and popular business
structure.
Partnership: is a form of business where two or more people share ownership
and the responsibility for managing the company and the income or losses the
business generates.
Corporation: is a legal entity that is separate and distinct from its owners, they
enjoy most of the rights and responsibilities that an individual possesses.
Limited liability companies: is a corporate structure whereby the members of
the company are not personally liable for the company’s debts or liabilities. Is a
mix between a corporation and a partnership or sole proprietorship.
Export- import business: is a company that facilitates trades of goods and
commodities between domestic and foreign companies.
Profit or loss statement: is a financial statement that summarizes the costs
and expenses incurred during a specified period of time. It provides information
about a company’s ability or inability to generate profit.
Accrual method of accounting: is an accounting method that measures the
performance and position of a company by recognizing economic events
regardless of when cash transactions occur.
Retirement account: is a tax-advantaged investing tool that individuals use to
earmark funds for retirement savings.
Unlimited liability: it involves general partners and sole proprietors who are
equally responsible for debt and liabilities accrued by the business. This liability
is not capped and can be paid off through the seizure of owner’s personal
assets.
Insurance: is a contact, represented by a policy, in which an individual or entity
receives financial protection or reimbursement against losses from an insurance
company.
Judgment creditor: is a person or company that a court of law has decided has
the legal right to receive money from another person or company.
 Loan: is the money, property or other material goods given to another party in
exchange for future repayment of the loan value amount, along with interest or
other finance charges.
Capital: financial assets, such as funds held in deposit accounts, as well as for
tangible factors or production, it includes facilities like buildings used to produce
and store manufactured goods.

3. El texto sugerido al inicio de esta evidencia cuenta con varios párrafos, y al

interior de cada párrafo se encuentran varias ideas principales. Por favor, lea el
material complementario “Identifying the main idea” para conocer cómo se
puede encontrar la idea principal en un párrafo escrito en inglés.

4. Luego de analizar el material complementario, por favor escriba las ideas

principales de cada párrafo, en presente simple, en inglés. No haga
transcripción literal de los párrafos. A continuación, transforme la oración a
presente progresivo, también en inglés.

Simple Present Tense Present Progressive Tense

The structure of a business is the most
important factor of a company and the
entrepreneur has to choose the one
that best suits him and the company.
There are many different ownership
structures like partnerships,
corporations, limited liability companies
and sole proprietorships, which are
companies conducted by an individual,
this person is the one responsible for
all operations and who makes
decisions without consultation
One of the advantages of sole
proprietorships is that they can be
organized and controlled easily, it’s
also simple and not expensive at all
and they require little or no
government approval.
The most important factor of a
company is choosing the structure of a
business and the entrepreneur’s job is
looking for the one that bests suits him
and the company.
Partnerships, corporations, limited
liability companies and sole
proprietorships are the different
options you can be using for
structuring the ownership of your
business. Sole proprietorships are
companies that are being conducted
by an individual, this person is the one
holding responsibility for all operations
and who is going to make decisions
without consulting anyone.
The first advantage of sole
proprietorships is that organizing and
controlling them results easy, they are
also simple and not expensive at all
and the government approval is not
needed.
The second advantage is that their
management flexibility is better than in
partnerships or corporations. The
owner makes all the decisions and can
take away money or other assets of
the business without consequences,
they can also transfer or close the
business.
The third advantage is that these types
of businesses have less government
regulations than the others.
The fourth advantage is that the owner
is taxed as a person, and the rate for
an individual is lower than the
corporate income tax rate and they
have also de capacity to establish tax
exempt retirement accounts.
The main disadvantage sole
proprietorships have is the risk of
unlimited liability, the owner is held
accountable for the debts of the
business, they can buy insurance to
protect against these debts but if it’s
not sufficient, the debts will be paid
from their personal assets. Another
disadvantage is that the capital for the
business has to come from personal
funds and loans, the third
disadvantage is that not everybody has
the skills to run an import-export
business. And lastly these kinds of
business can be over when the owner
is dead or disabled.
The second advantage is that their
management flexibility is better that in
partnerships or corporations. The
owner is the one capable of making
decisions and taking away money or
other assets of the business without
having any consequences, they’re also
capable of transferring or closing the
business.
The third advantage is that these types
of businesses are having less
government regulations than the
others.
The fourth advantage is that the owner
is getting taxed as a person, the rate
for an individual is lower than the
corporate income tax rate and they
have also the capacity of establishing
tax exempt retirement accounts.
The main disadvantage sole
proprietorships are having is the risk of
unlimited liability, the owner is being
held accountable for the debts of the
business, to protect against these
debts they are buying insurance but if
it’s not sufficient, the debts are going to
be paid from their personal assets.
Another disadvantage is that the
capital for the business is coming from
personal funds and loans, the third
disadvantage is that not everybody has
the skills to be running an import-
export business. And lastly these kinds
of business are over when the owner is
remaining dead or disabled.
5. Organice las ideas en un solo resumen, de manera que se conecten
coherentemente, en 15 líneas.

The structure of a business is an essential factor in a company and an entrepreneur has to

choose the one that best suits it. There are different ownership structures that a company
can implement, these are: partnerships, corporations, limited liability companies and sole
proprietorships, the last one being the most interesting. Sole proprietorships are
companies conducted by only one person who is responsible for all operations. This
business structure has its advantages but it also has some disadvantages. The
advantages include the way it can be organized and controlled, the simplicity and low
expenses it handles, it doesn’t require government approval, the owner makes all the
decisions and is capable of taking away money/assets of the business without
consequences, the owner can transfer or close the business, it has less government
regulations than the other types of businesses and the owner pays less taxes because is
taxed as an individual. The disadvantages are, the risk of unlimited liability, the owner is
held accountable for the debts of the company and if they’re not paid, the money will come
from personal assets, capital from personal funds, not every owner have the skills required
and these kinds of business can be over when the owner dies or has a disease.

Nota: para el desarrollo de esta evidencia se debe tener en cuenta el material de

formación “Using simple present and progressive to export” y el material
complementario asociado a esta actividad de aprendizaje.

Desarrolle esta evidencia con la herramienta ofimática de su preferencia y envíe el

archivo al instructor a través de la plataforma virtual de aprendizaje en formato
.doc o .pdf.

Pasos para enviar la evidencia:

1. Clic en el título de la evidencia.

2. Clic en Examinar mi equipo y buscar el archivo previamente guardado.
3. Dejar un comentario al instructor (opcional).
4. Clic en Enviar.
Nota: esta evidencia es de carácter individual. Recuerde revisar la guía de
aprendizaje con el fin de verificar que ha realizado todas las actividades
propuestas, saber cómo desarrollarlas y entregarlas correctamente.
 Criterios de evaluación
Realiza resúmenes de la información relevante y detallada de un texto técnico en
inglés.