Economics » Business Organisations » Funding and Management of Business Organizations

Funding and Management

Funding and Management

S/N

Business Organisations

Funding

Management

1.

Sole Proprietorship

a. Personal savings.

b.  Borrowings from banks, relations and friends.

c.   Ploughing back of profits to expand the business.

d.  Inherited capital.

The sole proprietor/owner.

 

2.

Partnership

a.     Contributions from members.

b.    Benefits from credit facilities.

c.     Re-investment of profits.

d.    Borrowing from financial institutions.

The members of the partnership (besides the dormant and nominal partners.

3.

Private Limited Liability Company

a.     In the early stages, personal resources and those from friends and family.

b.    Bank loans.

c.     Angel investors (high net worth individuals who lend funds in exchange for ownership stakes in the company).

d.    Issuing of shares and debentures.

They are managed by a board of directors, who are accountable to the shareholders.

4.

Public Limited Liability Company

a.     Selling shares to the general public.

b.    Loans.

c.     Retained profits.

They are managed by a board of directors, who are accountable to the shareholders.

5.

Cooperative Society

a.     Membership fees.

b.    Common or preferred stocks.

c.     Bonds.

d.    Borrowing from banks or other sources.

e.     Members’ savings kept in the business in the form of reserves.

The cooperative manager is responsible for running the business, subject to the direction and review of the board of directors, which, in turn, is accountable to the membership of the cooperative society.

6.

Public Enterprises

They are funded through government’s sources of revenue, such as tax and the profit that may be gotten from their operations.

They are managed by public authorities

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