Accounting for Business: Types of Enterprises and Forms of Finance

ACCOUNTING FOR
BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
Task..................................................................................................................................................1
A. Three different types of business enterprises with examples.................................................1
B. Difference between two forms of share capital and two forms of long-term debt in context
of source of finance of listed public limited companies.............................................................2
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Accounting for business is associated with recording, analyzing, interpreting and
presenting the information related to the finance of the company. It has a vital role because it
helps the organization to record the expenses and also provides the proper management. This
report will outline the three different types of business enterprise and difference between two
forms share capital and two forms of long-term debt in source of finance of listed public limited
companies.
Task
A. Three different types of business enterprises with examples
Sole Traders: Sole traders are commonly referred as sole proprietorship, which is
engaged in a simple business in which single person only run and acquire the whole business.
All the profits and losses are in the hands of single person only (Kasahun, 2020). It is one of the
easiest business to setup as less capital is required in order to start the business. It is easy to start
and easy to wind-up whenever required by the proprietor. The main drawback of this business
structure is that they do not have any protection from the government. All the liabilities are
borne by the individual only. For example, Ebay, Walmart, J.C. Penney and Marriott Hotels are
some sole traders in the United Kingdom. These firms work as sole proprietor and enjoys the
profit and bear all the looses by themselves only.
Partnerships firms: Partnership means doing agreement between two or more partners
in order to start a new business in an already decided ratio. It is also very easy to start as
different partners gives their share as a capital or asset as their share in the firm. It includes any
type of business, occupation or profession to start a partnership firm (Horan, 2019). The profits
are share among the members in the decided ratio. The firm can be carried on by all or any of
them stating themselves as a partner of the partnership firm. There is an agreement between the
partners in which they decide the name of the firm, agreed ratio, name of partners, occupation
carrying by them, etc. For example, Uber and Spotify, Apple and master card, BMW and Louis
Vuitton are the partnership firms of the U.K. This makes them to share their profit and looses in
decided ratio.
Companies: A company is defined as the legal entity which formed by having group of
members engaged in doing some commercial business or industrial business (Heyes and et.al.,
2018). Companies can be either private or public. Public companies are those whose share
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