Sole traders and general partners can have their separate properties answer for the liabilities of the business organization because of their unlimited liability when the business entities go wrong There is also anonymity, in the limited company as one can appoint nominee officers in said business organization. Such anonymity can be an advantage as to keep some sense of invincibility in some aspects as compared to revealing many possible weaknesses to those who are interested with the company. As compared with a partnership, many problems can be avoided in case of limited company. This would include defining who is in charge and who should own the business and in cases of resignation of a partner that could disrupt the business. Another advantage over the sole trader and partnership could come from better credibility brought from better transparency and certain anonymity in the market place. The effect of this could be some degree of ease in raising loans for the business. Lower tax liabilities compared to a sole trader could also arise. While a sole trader’s tax could reach as high as 40% of net profit, an owners of a limited company can so drawing a salary, which could in effect an avoidance of tax for a higher rate can be avoided Limited liability as an organizations are not without some of the disadvantages however. One is chance of ownership of assets being locked up in the company. There is also less privacy and more transparency because of the need to register company's accounts, officers and shareholders at Companies House. 2.2 Task 2 --The initial cost. Provide detail of items of expenditures you will need to obtain before you start trading. State how much capital will be needed on commencement, and how and where this initial finance would be obtained. Investigate a range of different sources of finance and comment on how they compare. State why the chosen sources of finance are appropriate for your business. The details of expenditures that that the owner would need to obtain before he/she starts trading include the following. He/she would need to spend for the place to rent. He/she would need a land and building which he/she can either buy or rent. In addition, he/she would need of course to buy for inventories to sell. He/she would need to pay for the salaries of sales and store personnel. Basically the amount of capital would be guided by the amount of revenues that the owner could be making per period. The higher the expected revenues, the higher would be the need for expenditures as the same could mean higher space to place goods for sale and serve the customers. The expenditures there could include but capital expenditure and non-capital expenditure. The different sources could come from my investment which can either be in the form of cash or property. Another source from loans which can come from suppliers who will sell the goods on terms. Thus
Running Head: Managing Financial Resources Managing Financial Resources and Decision Name of of Subject of Professor 17 May 2012 1. Introduction This paper seeks to accomplish, from the point of view of the owner, the following: (i) to explore the sources of finance available to a business, (ii) to analyze the implications of finance as a resource within a business, and (iii) to analyze and evaluate financial performance of two business entities using given financial ratios and make recommendation as which of them should be chosen as an investment option…
The most important element for any business is the availability of the funds and finance. Almost all organisations make sure that they have the required funds in order to run the operations of the business in effective and efficient manner. Main issue in the starting of any business or organisation is to search for appropriate source of finance in order to make sure that the start-up funds are available (Johnson, & Scholes 2001).
Other aspects include auditing by external firms, which ensures that accounting fraud is prevented by examining the ledgers of a company with other records to ensure that the ledgers provide a true and fair view of the company's financial dealings.
Accounting is used for drawing up the financial records of a company in order to make important decisions, such as whether or not to make a major investment.
Types or techniques of costing means the manner of ascertaining costs. Opportunity cost refers to the value of an advantage relinquished in accordance with another option. It is the cost of the best alternative foregone. It is the value of benefits foregone when one decision alternative is selected over another.
The Food and Agriculture Organization of the United Nations (FAO, 1997) explains in some detail the following sources for financing a business:
"Ordinary shares are issued to the owners of a company. They have a nominal or 'face' value, typically of $1 or 50 cents.
The revenue expenditures connected with running the business include the lease of 50,000 CZK monthly or 6000,000 CZK for the one year advance payments for the lease required by the owner and the 1000,000 CZK inventories which are the initial stock of food and drinks.
It is assumed that all the costs (£ 250 million) will be incurred in the first year of operations. Hence it is necessary to identify suitable sources of finance available to JS and co so that the investment can be made effectively.
JS and Co
There is always a tendency of expenses increasing and this is why the organization needs to have a financial plan so as to manage unexpected expenses and emergencies such as unexpected increases in operational costs. However, the most important part of financial
She already has 200000 pounds and needs to get 600000 pounds through sources of long term and short term finance. We need to analyze different sources of finances that can eb taken to consideration for bearing the
it is not a public listed Company then C and C hydraulics may decide to opt for IPO (Initial Public Offering) option to raise the capital in order to meet their fund requirements for the Company expansion into new sectors. This is the most effective mean to generate finance and
12 pages (3000 words)Essay
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