Types of Business Enterprises and Long Term Sources of Finance for Listed Companies

Accounting for
Business

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
What are the different types of business enterprises and why do they exist. Explain using
examples......................................................................................................................................3
Critically compare the two forms of share capital and long term debt with reference to the
long term sources of finance available for listed companies......................................................4
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
A business organization is a type of entity that is concerned in providing the consumers with
goods and services with the primary content of earning a profit. It is applied to every other firm
who deals in commodities or services to be sold and from which they earn a profit (Soto-Acosta,
Del Giudice and Scuotto, 2018). This report covers the three main types of business enterprises
which can be used by the entrepreneurs to start a business. The report further talks about how
these business enterprises can be financed and can work efficiently with the funds provided.
TASK
Business refers to an entity that is formed specifically to deal in the commercialism of goods and
services in the view of gaining profit. These are done on commercialized basis to the customers.
Most of the enterprise exist to gain a return and these are counted as the profit for the business
owners (Ling, 2018). Profit is the reward for risk taken, which means that profit is in reality a
kind of payment that is earned by the business owner in taking the risk to spend in the business
and carrying off its everyday actions. Here comes a distinction in the functions of different
business. As the owners have diversified roles, this makes the basis for different business
enterprises. There are three types of business enterprises and these will be discussed further
What are the different types of business enterprises and why do they exist. Explain using
examples.
Sole Proprietorship is the simplest kind of business organization as it is owned and governed by
a single individual known as sole proprietor. It is a type of business enterprise which is owned by
one person only. Sole proprietor comes into existence as the owner wants to invest small capital
and manage a small scale of business. All the decision-making knowledge regarding the business
lies in the hand of this single person called sole proprietor (Negedu Ameji, and et.al., 2020). The
owner has unlimited liability. Example of sole proprietorship is, barbershop, sweet shop etc. In a
sole proprietorship business, liability of the firm can be unlimited and proprietor suffer every
loss of the business even owner's private property is liable for the obligations occurred. As
decision makers of the business is their owners who is in position to maintain all the business
affairs and secrecy to himself.
Partnership firms is other type of business enterprise in which the ownership is divided among
various people who in business terms are called partners. These people have the objective of