Business Theme 2.1
- Created by: CharlPow
- Created on: 13-03-17 23:03
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- 2.1 Raising Finance
- 2.1.1 Internal Finance
- Owners Capital: Personal Savings
- Retained profit
- Sale of assets
- 2.1.2 External Finance
- Sources of finance
- Family and friends
- Banks
- Peer to peer funding
- Business angels
- Crowd funding
- Other businesses
- Methods of finance
- Loans
- Share capital
- Venture capital
- Overdraft
- Leasing
- Trade credit
- Grants
- Sources of finance
- 2.1.3 Liability
- Implications of limited liability
- The legal protection available to the shareholders of privately and publicly owned corporations under which the financial liability of each shareholder for the company's debts and obligations is limited to the par value of his or her fully paid-up shares. The company itself, as a legal entity, is liable for the rest. Also called limited personal liability
- Implications of unlimited liability
- Indefinite extent of liability to pay a firm's debts or obligations, extending beyond the investments of the firm's owner(s), partners, or shareholder(s) to their personal assets. This extent of liability is assumed in an unlimited liability company such as a sole-proprietorship or a general partnership
- Implications of limited liability
- 2.1.4 Planning
- Business plan
- Set of documents prepared by a firm's management to summarize its operational and financial objectives for the near future (usually one to three years) and to show how they will be achieved. It serves as a blueprint to guide the firm's policies and strategies, and is continually modified as conditions change and new opportunities and/or threats emerge. When prepared for external audience (lenders, prospective investors) it details the past, present, and forecasted performance of the firm. And usually also contains pro-forma balance sheet, income statement, and cash flow statement, to illustrate how the financing being sought will affect the firm's financial position
- Cash flow forcast
- Business plan
- 2.1.1 Internal Finance
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