List some common forms of business organization, and discuss how access to capital differs across these forms of organization

Different forms of business and their access to the capital:

1. Sole proprietorship:

This form of business is managed and run by a single individual. The owner alone makes the capital contribution or borrows from his family and friends. He takes all the decisions related to the organization and bears all the risk.

2. Partnership:

In this form of organization, the management is done by two or more individuals, called partners, who contribute the capital in a specific ratio and share the profits and losses in the same ratio. Decisions are taken by the partners mutually.

3. Private Limited Company:

This is a registered form of business, under which the owners or promoters contribute the initial capital. For the additional capital management, opt for loans and borrowings from the financial institutions, banks, or angel investors. They also sell ownership through equity to the investors. Long and short term borrowings or loans are also taken for meeting the daily business requirements.

4. Public Limited Company:

Under a public limited company, the management raises a huge amount of capital from the common public through shares and debts. Organizations opt for this financing when they are about to invest a large amount and try to reduce bank loans and borrowings.