Business paper



Business paper

Partnerships

An arrangement where parties agree to cooperate to advance their mutual interests by the use of a business.

Advantages

Some of the advantages of Partnerships are that they are relatively easy to establish, and with more than one owner, the ability to raise funds may be increased. This is because two or more partners may be able to contribute more funds and because their borrowing capacity may be greater (Kaplan, 1982).

Partnerships are also valued by prospective employees because they may be given the incentive to become a partner.

Disadvantages

Some disadvantages to Partnerships are that the business partners are jointly and individually liable for the actions of the other partners. Since decisions and profits are shared, disagreements can occur. A partnership is for the long term, and expectations and situations can change, which can lead to dramatic and traumatic split ups. In addition, Partnerships may have a limited life just as a sole proprietorship does; in that they run the risk of dissolving upon the withdrawal or death of a partner (Charles, 2010).

Sources of finance for small business

Every business needs cash to function. Deciding how to raise that cash can be a difficult decision. There are many options for small business in raising money such as borrowing from a bank, selling bonds, or soliciting cash from outside investors. For every option, there are multiple platforms. Each option should be carefully considered based on needs.

For a small business, they must consider selling stock to raise capital for his funding needs. Stocks, bonds, and mutual funds are otherwise known as securities. They represent secured, or a financial claim on the part of investors. small businesses could consult with an Investment Banker on this idea. The role of the investment banker is to help issue and sell new securities. They advise on timing and financial terms of new issues, assume liability for new securities, and help create distribution networks for getting the new securities into the hands of individual investors. All of these are important factors for a business because it is an easier way to reach investors that are looking for additional ways to earn money.

The stock market plays a key role in the growth of industry and commerce of our country and affects our economy to a great degree. Some investments are safer and offer lower returns, and others are riskier and offer higher returns. To manage these risks and rewards, financial management is a must for any business owner .Financial management has the responsibility of determining a company's long-term investments, obtaining funds to pay for those investments, conducting the daily financial activities, and helping to manage the risks the company takes. Without sound financial management, a company would not have a grasp on how much or little money they were making or spending. A business must evaluate their spending and earnings just as a person would evaluate their own check book. When the figures are evaluated, the company must look at what is working for them to earn capital, ...