Accounting for Business: Sole Traders, Partnerships, Companies, and Long-Term Sources of Finance

This report discusses the different types of business enterprises such as sole traders, partnerships, and companies, and the difference between two forms of share capital and long-term debt in the context of long-term sources of finance of listed public limited companies. It also covers the characteristics of each type of business and the sources of funding available to them.

Accounting for
Business

INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Why do think that three different types of business enterprise (sole traders, partnerships and
companies) exist? Use examples to illustrate your answer.........................................................3
TASK 2............................................................................................................................................4
Critically distinguish between two forms share capital and two forms of long-term debt in the
context of long-term sources of finance of listed public limited companies...............................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
A company is an entire business that leads to different types of segments that focus on
goodwill, debt, and the nature of its employees. This is a structure that includes various corporate
sectors in which the public sector participates, private companies with equity capital, and public
interest companies. Entrepreneurs and small business owners have different ways to launch a
new management company with selective benefits (Andon, and Clune, 2021). The following
report covers the discussion of varied sort of business enterprises such as sole traders,
partnership and companies. And at last it involves difference among two forms of share capital
and long term debt.
TASK 1
Why do think that three different types of business enterprise (sole traders, partnerships and
companies) exist? Use examples to illustrate your answer.
Sole trader business
Sole trader is also relates to the combined unit of business that have only one trader who deals
and operates several functions and managerial activities in an effective and efficient manner. The
trader will also works with managements personal income tax on the profit who are gained by
them as annually in an effective and efficient manner (De Wolf, Christiaens, and Aversano,
2021). The management that are considered in the section of business is Barclays that are owned
by single trader.
Characteristics
 No liability protection - The only advantage of being a sole proprietor is that the
government provides the same legal basis for their liabilities of the company. Creditors of
sole proprietors subdivide as movable property in terms of compensation for the business
and its loss.
 Insufficient tax structure - Sole proprietors can easily take effective measures to
improve some of their business operations in terms of profits and losses, which can go
directly into the personal framework of income tax filing. This is because it is a deviation
from a company that can file a tax return for trade tax.
Partnership

Partnerships can be defined as a dealing between an individual and an executive or
manager. As with partnerships, individuals and executives share both the company's interests and
debt.
Characteristics
 Existence of an arrangement - The term partnership can be defined in accordance with a
1932 agreement or law that called partnership relationships whose status is increased by
different types of segmentation.
 Sharing of profit - Partnership goals are also referred to as the term for how to make a
profit according to an agreement and participate in an equal industry and its shares
(Gonçalves, and Gaio, 2021).
Company
A company is a system that follows activities and functions to achieve managerial and
goals. It also includes rules, roles, and responsibilities that identify the sources of information
that are assembled in the sections and managing the businesses dealings in an effective and
efficient manner.
TASK 2
Critically distinguish between two forms share capital and two forms of long-term debt in the
context of long-term sources of finance of listed public limited companies.
Equity capital refers to the funds that a company receives from the sale of ownership to
the general public. Companies can raise new funding from the following sources:
Capital market
Capital markets are the organizations and mechanisms by which 4,444 companies, other
institutions, and governments raise long-term funding in an effective and efficient manner
(Junhong, and Zehua, 2021). Therefore, it involves all long term borrowings from banks and
financial institutions, borrowings from foreign markets and financing through the issuance of
various securities such as equity bonds and bonds.
 Issuance of new shares.
 Rights issue (Loan stock, Retained income, Bank loan, Government fund, Fund for
business expansion plan, Venture capital, Franchise)
Long term debt

Long term loans can be defined as financial instruments with a term of more than one
year (such as bank loans, bonds, leases, and other forms of debt loans) and public and private
equity products. The due date is the period when a monetary claim (loan, bond, or other financial
instrument) is created to the last payment date when the remaining repayments and interest are
paid. The equities that do not have a final capital repayment date can be considered an indefinite
product (Rajgopal, 2021). The one year period corresponds to the definition of fixed investment
in the general accounts. The loan term reflects the risk sharing agreement between the loan
provider and the user. Long term lending shifts risk to providers like fluctuations in default
probabilities and changes in other conditions in financial markets. B. Interest rate risk must be
borne. Providers often demand a premium to compensate for the higher risk of this form of
financing in an effective and efficient manner.
On the other hand, short-term financing shifts the risk to the user because it forces the
user to keep updating the funding. As it is possible that most of the long term loans are provided
by the banks. The utilisation of equity will involves the private equity that is limited to
businesses of all sizes. As the financial system develops as per to the duration of external
financing. The long term share of banks in lending and might to be increases with general
income and the development of banks, capital markets and institutional investors (Dou, 2021).
Long term lending to companies by issuing stocks, bonds and syndicated loans that has also
increased significantly in recent era, but on the other hand the few large companies have access
to long term lending through the stock and bond markets in an effective and efficient manner. As
by promoting non - bank intermediaries (pension funds and investment trusts) in terms of the
developing countries that might does not always guarantee an increment in demand for long term
of the assets.
CONCLUSION
From the above mentioned report it has been concluded that, the capitalists and small business
owners have the resources to manage the various operational and functional areas of the business
to evaluate them. Corporate management treats consumers and visitors in the oriented segment to
spread the aware of their services. It is agreed that some departments will comply with a range of
various excise tax and financial accountability practices to determine how to rely on government
agency and on their business law.

REFERENCES
Books and Journals
Andon, P. and Clune, C., 2021. Governance of professional accounting bodies: a comparative
analysis. Accounting, Auditing & Accountability Journal.
De Wolf, A., Christiaens, J. and Aversano, N., 2021. Heritage assets in the due process of the
International Public Sector Accounting Standards Board (IPSASB). Public Money &
Management, 41(4), pp.325-335.
Gonçalves, T. and Gaio, C., 2021. The role of management accounting systems in global value
strategies. Journal of Business Research, 124, pp.603-609.
Junhong, M. and Zehua, W., 2021, February. Research on the Intelligentization of Accounting in
the Information Technology Environment. In 2021 International Conference on Public
Management and Intelligent Society (PMIS) (pp. 412-415). IEEE.
Rajgopal, S., 2021. Integrating practice into accounting research. Management Science, 67(9),
pp.5430-5454.
Dou, Y., 2021. The spillover effect of consolidating securitization entities on small business
lending. The Accounting Review, 96(5), pp.207-229.