The essay provides detailed information about three different types of business enterprise, Tesla. It also provides information about the difference between two forms of share capitals and two forms of long-term debt in the context of long-term sources of finance of listed public limited companies.
<Business enterprise and public limited companies>
Date of submission: 22/11/2020
1
, 1. Introduction
The essay provides detailed information about three different types of business enterprise,
Tesla. It also provides information about the difference between two forms of share capitals
and two forms of long-term debt in the context of long-term sources of finance of listed public
limited companies.
2. Three different types of business enterprise (sole trader, partnerships,
and companies)
A. Sole Trader
According to Formosa (2018), this is the simplest structure when starting a business. The main
characteristics of a single trader are the following.
• The owner is obligated for business of the enterprise.
• If is collapse, the possessor must refund the credit and isn’t able to disappear away.
• A salesman must refund for lawful damages that may climb due to administration of
operations.
• It takes all profits after taxes, and it is also responsible for any droppings that the business
may suffer.
• Such a business ends abruptly with the death of the sole trader or when the business goes
bankrupt.
B. Partnership
A partnership exists when there are certain holders of an enterprise, and the business is not
affiliated or arranged as a limited liability company. Partners participate in profits, losses, and
debts. Partners could be individuals, corporations, trusts, other partnerships, or any
combination. One of the biggest disadvantages is that the possessors have unlimited liability
for all debts and lawful obligations of the enterprise (Hall, 2018).
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