Introduction
This essay will be covering the sources of finance and the impacts which will occur when starting up a new business. This essay will be covering financial impacts within an organisation and also the advantages and disadvantages on source of finance. Also what source should the client use for their new business idea.
Scenario
A client wants to start a retail business selling handmade birthday cakes. The client will manufacture the cakes in house. The client also plans to sell the cakes online and in a small shop which is based in Uxbridge. The client is currently uncertain whether to set up as a sole trader, partnership or as private limited company. The client is currently confused about the sources of finance that could
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Partnership: Partnership business is when two or more people are involved in the business they put in the money their skills and other resources and share profit this source of finance is more suitable for a company if they want office space and more features for their company. For example a law firm needs a property for them to meet their clients for a law firm property they will need to pay it off by mortgage.
Limited Companies: Limited companies are incorporated which means that the companies have their own legal identity which means they can sue or own assets in their own right. Limited companies are divided into parts called shares. This means who ever owns one or more of these are called shareholder. When a company is limited is then means that the companies than have their own legal right which means that their owners are not personally liable for the firms debts.
Private limited company: Private limited company is different to limited company in private limited company the funds are borrowed through family and friends or personal investments. This option is good for a small company as in public limited company there will be debts where as in private limited company there will be less pressure in giving the money back but it may cause problems in between the relation in family. Implication of the different source of finance.
Overdraft: Bank overdraft can be a good source of short term finance help
Our business is a partnership type of business because it’s owned by two people. Through our partnership, we will increase the level of our business, making decisions and implementation of changes can be fast, and we cover each other for holidays and
Some of the benefits of a Limited Liability Company are that as a Limited Liability Company it limits the owner of personal liability for business actions. The members are liable, but normally just to the amount of their share in the business. Their individual assets are not considered for resolving business debts. The fact that your personal assets are protected is a great benefit. Whereas, operating under a partnership all members are individually accountable for the company’s debt. In comparing the differences between a
Limited company is an organisation in which allow you set up and run your business. Any profits which are made within a limited company stays within the company after it has paid corporation tax, which then allows the company to share its profits.
Limited liability means it does not exceed the amount invested in a partnership or limited liability company. The limited liability feature is one of the biggest advantages of investing in publicly listed companies. While a shareholder can participate wholly in the growth of a company, his or her liability is restricted to the
An advantage of being a public limited company is having limited liability because of only being responsible to amount invested into Tesco PLC. Another advantage of a public limited company is being able to liquidate. This is when shares are bought or sold to shareholders if on the stock exchange it’s quoted. An additional advantage of a public limited company is the share value as Tesco PLC’s value will be shown by the market capitalisation from being the share price being what it’s based on. An extra advantage of a public limited company is having better access to capital because of the existing and new investor are raising share capital.
In this assignment, I will explore different types of businesses. Some of these will include: Sole Traders, Private Limited Companies (Ltd), Public Limited Companies (Plc), Partnerships, Non-Profit Businesses, Franchises, Co-operatives. In this instant, I will be exploring a Public Limited Company. Tesco.
A partnership is an arrangement between two or more groups, organizations or individuals who work together to achieve common aims or who have common interests.
A partnership is a business that has 2 or more people working in it like Starbucks is a business that is in a partnership. The advantages are you have more capita available to you and the company you have combined skills with other workers simple to set up you have tax advantages the disadvantages are unlimited liability you have to share your profit with the other owners you can have conflicts with owners or workers that do not agree partnership ends to death and possible
This is the most common type of company and is what most people have in mind when considering whether or not to set up a company. Each shareholder’s liability is limited to the amount unpaid on the shareholding owned by them. However, the shareholder must also be aware that they run the risk of losing monies paid to the company whether in full or part payment of the shares owned by them.
Also each partner must register for Self Assessment with HM Revenue & Customs and complete an annual tax return. Partners in this type of business need to raise money for the business out of their own assets or with loans.
The choice of legal status for setting up a new company can be complex and is dependant on various tax, commercial and legal considerations (Accountingweb, 2014).
iA Limited Liability Company (LLC) is a business structure allowed by state statute. LLCs are popular because, similar to a corporation, owners have limited personal liability for the debts and actions of the LLC. Other features of LLCs are more like a partnership, providing management flexibility and the benefit of pass-through taxation.
A general partnership can be as simple as a written agreement between two or more people while a limited partnership limits personal liability of each partner to their capital investment”. It is important in this type of business structure to hire an outside party such as an attorney to draw up the legal documents that will dictate each partner’s role, responsibility, and liability.
A partnership is a business organization where the partners own the business together and are
Private limited company is a legal and juristic person established under companies Act. Private limited company is of two types ,which are by shares and by