Different Types of Company and Their External and Internal Source of Finance

This report discusses the background of different types of companies, including partnership, sole proprietorship, public company, and private business. It explores their external and internal sources of finance and highlights the differences in long-term financing for each type of business.

Accounting with
Business

Contents
MIAN BODY...................................................................................................................................3
Illustrate about the Background of Different types company along with their external and
internal source of finance. Difference each type of business external long term finance......3
CONCLUSION................................................................................................................................1
REFERENCES................................................................................................................................2

INTRODUCTION
A concept of business accounting is proper compliance oriented to analyse and evaluate
financial related statement towards business related. Accounting might be process to be
accomplish by individual person in small business, but in large business there is requirement of
finance department who handle operation as well as overall financial activities and generate
better profit and loss (Putra 2019.). Trading, balance sheet etc.. 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
Illustrate about the Background of Different types company along with their external and internal
source of finance. Difference each type of business external long term finance.
 Partnership: In the business when two or more people are come together with abide all
terms and condition successful to beginning of business firm is called partnership. In
general partnership company, as all member share both profit and liabilities.
Internal Source of Finance:
Determine needs and make plan: As before measuring sources of investment in
partnership where partners must be concerned to determine their needs in terms of what is
main priority. After mapping personal needs the developing of business which provide
proper quality of planning effectively.
External Source of Finance:
Explore venture capital funding: In this partnership business seeking enxternal source
of finance were capital funding from venture stats those business who are ready to invest
for long term profitability (Nielsen., 2018).
 Sole proprietorship: This type venture is run through single ownership where profit and
liabilities is gain and handle individual sole trader.
Internal Source of finance:

Putting up own money: At the initial stage of starting business where single owner can
invest his or her saving whatever had to beginning the business as possible (Paseková,
Kramná and Dolejšová, 2019). This would be only the investment option within early
days and flexible too.
External Source of Finance:
Reinvesting retained profit: These are those profit which made at the process of
business trading over the years and get some retained from other external sources through
better day to day expenses.
Difference and Similarities of Sole Proprietorship and Partnership External source of
finance towards long term.
Basic Reinvesting Retained Profit Venture Capital Funding
Differences It is having difference that sole
proprietorship is generally invest
from savings and profit which
attained through external business
trade over the years (Lev., 2019).
As well as it takes long time to
saving money from retained profit
that get through different external
sources like investments and others.
This is outsourcing type of funding
in partners are convince to business
leader to invest in their business
where they can commence their
business towards long run
Similarities As only similarity is generate that it
is also optimise from other business
while trading in motive of attaining
profit.
Only one similarity to arrange
capital funding through venture is
to making assure for long term
profit and liabilities would share
equal manner.
 Public Company:. On the basis of this company is regulates through public offering and
guidelines from government preferences. The main merit of public company that it only

focus on financial market through which selling of stock within better equity or bond
which raise capital and better business expansion.
Internal Source of Finance:
The internal finance source of public company is to retained profit, the sales of assets and
reduction or controlling of working capital.
Sale of Assets: It is type of internal source of finance where to run the business or
gathering of finds is optimise through selling of personal assets within effective manner.
External Source of Finance
The Bottom line: As per this ideal world, a company would simply obtain where all
money which is needed to grow through selling of good and service for certain liquidity
money.
 Private Business: this type of business where it is generally owned through privately
and own business need to create investment and profit as per limited term (Enache
García‐Meca., 2019). This only create issue within stock with have their shareholder by
their share are not to sell in public domain. To make it selling motive private firm need to
opted for IPO.
Internal Source of Finance:
Debt collection: It is refer about money lending that borrow through lender by company
along with certain interest on the basis of investment amount. The company are generally
require to better repay the money as per particular period of time.
External Source of Finance:
.Funding through Equity: On this company which can be undertaken on better equity
investment and venture that sell towards having portion of company within investor
(Bonsón and Bednárová, 2019). Equity funding includes different form of shares and
preferences shares effectively.
Difference and Similarities of Private Company and Public company External source of
finance towards long term.
Basic Funding through Equity Bottom Line
Differences This generate money on equity
basis which company undertake
To generate money probability
by selling of own assets for

from investment on which sold out
half portion of company part.
some liquidity cash.
Similarities It is commence through collective
security of company’s portion or
assets
Whereas, bottom line is
emphasis of selling product
and service to generate profit
or saving money.

CONCLUSION
From above report of Accounting for business is concluded about different type of company
along with their internal and external source of finances. Apart from each business type have
their own external source finance in which it helps to make growth of their venture as well
as raise profitability and long term sustainability within competitive business.
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REFERENCES
Books and Journals
Putra, Y.M., 2019. Analysis of Factors Affecting the Interests of SMEs Using Accounting
Applications. Journal of Economics and Business, 2(3).
Paseková, M., Kramná, E., Svitáková, B. and Dolejšová, M., 2019. Relationship between
legislation and accounting errors from the point of view of business representatives in the
Czech Republic. Oeconomia Copernicana.
Lev, B., 2019. Ending the accounting-for-intangibles status quo. European Accounting Review,
28(4), pp.713-736.
Enache, L. and García‐Meca, E., 2019. Board composition and accounting conservatism: The
role of business experts, support specialist and community influentials. Australian
Accounting Review, 29(1), pp.252-265.
Bonsón, E. and Bednárová, M., 2019. Blockchain and its implications for accounting and
auditing. Meditari Accountancy Research.
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