Different Types of Companies and Their Sources of Finance

Accounting with
Business

Contents
MIAN BODY...................................................................................................................................3
Discuss the Background of Different types company along with their external and internal
source of finance for their existing and new product market.................................................3
CONCLUSION................................................................................................................................1
REFERENCES................................................................................................................................2

INTRODUCTION
Business Accounting is process of gathering and analysing the financial information
related to business activity. It record every business transition and generate better financial
statements (Ballou, Heitger and Stoel., 2018). It is important about different variety of reasons as
it keeping to tabs of overall assets, liabilities, inventory way to grow company that leads to next
productive level. In this report, the topic is sole proprietorship, private and public limited
companies along with cirticaly analyse towards each business form where how they get finance
source through term perspective.
MIAN BODY
Discuss the Background of Different types company along with their external and internal source
of finance for their existing and new product market.
 Sole proprietorship: It is also known as sole tradership where single person own the
overall business and invested his or her capital and make it run through individually. In
this there is no legal distinction between the owner for getting any better business entity.
Internal Source of finance:
Borrowing From relatives or friends: This is arrangement and source of internal
finance where proprietorship are more likely to believe in common source where investment are
being to sole business effectively (Birt, Chalmers and Bond., 2020). As it very easier and not
time consuming way to arrangement money for business.
External Source of Finance
Conventional Bank Loan: Many of sole trader are approach bank loans where it is known
as best external source of finance for individual business as well as partnership. In this
situation bank use the sole trader’s personal assets as mortgage and increase the credit for
approving loan.
 Partnership: A partnership is an arrangement between two or more person where they
own business operation as well as to share profit and liabilities. In general partnership
company, as all member share both profit and liabilities.
Internal Source of Finance: