LIMITED COMPANIES
CONTENT
- Sources of Capital for a Limited Liability Company
- Advantages and Disadvantages of Limited Companies
Sources of Capital for a Limited Liability Company
The following are sources of capital open to limited liability companies:
(i) Loans and Overdraft: These can be obtained from the bank by the company to finance their operations
(ii) Retained earnings or plough back profit: The profit made by the company can be set aside for re-investment.
(iii) Credit purchase: Raw material can be purchased by the company on credit.
(iv) Hire purchase: Companies can be granted hire purchase facility by the seller to acquire some of their assets.
(v) Equipment leasing: Companies can lease some of their equipment from a given leaser and make payment through rental payment through rental payment.
(vi) Sales of shares – Public limited liability companies can raise capital by issuing shares to the public through the stock exchange
(vii) Sale of debenture: These are long-term loans obtained form the general public at a fixed interest
(viii) Bill of Exchange: This is a document duly signed by debtors bank to the creditors and the creditor cashes the money with some documents.
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