Mfrd 1

3059 Words Apr 29th, 2013 13 Pages
Contents

Introduction 2 Identify and describe the various sources of finance available to Company 3 The implication of the different sources of finance to Company related to risk, legal, financial and dilution of control, and bankrupt. 4 Select the appropriate sources of finance for Company and make recommendations on the best ways of raising finance. 6 Assess and compare various costs involved with each sources of finance 8 Explain the importance of financial planning for Company 9 The information needs of different decision makers 11 The impact of finance on the financial statements 12 Conclusion 14 Reference 15

INTRODUCTION
Dong Kuang is a good friend of Paul Mottram the Executive Vice President, Asia
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There is no risk to raise capital because they’ve already known each other and that is their money’s saving. For example, at begin of this year; Kuang had purchased new machinery by using his own money £11,000 and a loan of £9,000.
However, the rate of contribution of each person determines the right of control of that one. There will be no dilution of control in business from the external. According Vietnamese business law, both Mottram and Kuang will be the owner of company, but they must choose one of them to be the manager.
If the company gets loss or goes to bankruptcy, Kuang and Mottram must be liable for debts or loss of business.
Government loan in Vietnam
Each year, the Government of Vietnam issues a packet of loan for investment that offers very low interest with long-term repayment. Kuang and Mottram can take the advantage of this by applying the requirement form to Department of Planning and Investment of Hochiminh city or Hanoi. This loan is low risk but the government will consider where their money goes.
However, the process of conducting the procedure is very complicate and contains some “black” fees in Vietnam.
Issuing shares – Being the Public Limited Company
At the present, Kuang and Mottram are partnership business. Transfer into Public Limited Company is a big problem for Kuang and Mottram.
Firstly, they will be diluted of management

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