There are several sources to consider when running a business. (2013, Don Hofstrand) Sources of finance is use to available to manage a company, due to all businesses need money, so where the money come from is known as source of finance. Source of finance has two different types, which is internal and external. Internal of source of finance is the finance is inside the business. For instead, profits can be kept back to the finance expansion. The external is the finance from outside the business such as creditors or bank.(2014, BBC) When starting new business, the company need money to invest in long-term assets such as equipment and building. The company need money to purchase materials, pat wages, and to pay the bills such as water and electricity. In-experienced entrepreneurs or the social entrepreneurs need often underestimate the capital needed for the everyday running of the business. This is the reason that why source of finance is crucial for any business. (2015, Ask Will …show more content…
One types of the share capital is authorized registered, maximum or normal capital. The maximum amount of capital, which a company authorized to raise from the public by the issue of shares, is known as authorized capital. It is a capital with which is a company is registered, thus it is also known as registered capital. Another types of share capital is issued capital, a company does not issue its authorized capital to the public for subscription, but issue a part of it. However, issued capital is a portion of authorized capital, which is not offered to the public for subscription which include the shares offered to the vendor for consideration other than cash. The portion of authorized capital will not offered for subscription to the public is known as ' un-issued capital. For example, capital can be offered to the public at a later