Different Types of Business Enterprise and Share Capital vs Long Term Debts

Accounting for
Business

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Different types of business enterprise....................................................................................1
Difference between two types of share capital and long term debts......................................1
CONCLUSION................................................................................................................................4
References:.......................................................................................................................................5
Books and Journals.................................................................................................................5

INTRODUCTION
Business enterprise refers to the process of setting up an idea of the entrepreneur, it is an
undertaking off the activities that are associated with the production of goods sales and
distribution of products and services (Imamuddin, 2021). The company raise capital from the
market with the help of shares and borrowings, some companies opt for both of these. In this
report different types of business enterprise are discussed. Further this report distinguishes
between two forms of share capital and long term debts that a business can choose while raising
capital from the market.
MAIN BODY
Different types of business enterprise
Sole traders: Sole trader proprietorship refers to the business that has only one owner and all
the risks and profits are entitled to a single person (Vassallo, 2017). This is considered as one of
the easiest type of business to establish, as there are less complications in incorporating a sole
proprietorship business. Microsoft is one of the example of sole proprietorship as Bill gates
started the idea on his own and later succeeded in establishing a trillion worth firm in the
industry.
Partnership firms: Partnership Enterprise refers to an association in which two more person
are involved, they share an agreement on which the profit sharing ratio is discussed. In these kind
of businesses all the owners are entitled to the risk associated with the business. Unilever is a
partnership firm which was started by the lever brothers, this firm is owned by more than one
people.
Company: A limited company refers to the business which is privately owned and managed.
These companies are run by the shareholders and board of directors (Pinto and Santos, 2020).
This is considered as a separate legal entity which is entitled to all legal obligations and rights.
An example of company operating in UK is Tesco PLC, it is privately owned company where
the board of directors are selected to make a decision regarding the position of the business.
Difference between two types of share capital and long term debts.
Share Capital
1