Financing a company through the sale of stock in a company is known as equity financing.Alternatively, debt financing (for example issuing bonds) can be done to avoid giving up shares of ownership of the company. Unofficial financing known as trade financing usually provides the major part of a company's working capital (day-to-day operational needs).
Sole Proprietorship/Partnership
If you start a business using your own money, you have formed a sole proprietorship. You own the entire business yourself. If three people pool their money together and start a business as a team, they have formed a partnership. The three people own the business, sharing the profit and decision-making.
Corporations
Any business that wants to sell shares of stock to a number of different people does so by turning itself into a corporation. The process of turning a business into a corporation is called incorporation.
Any business that wants to sell shares of stock to a number of different people does so by turning itself into a corporation. The process of turning a business into a corporation is called incorporation.
