Financial Accounting

Lecture 01
Types of Business Entities

• Sole
Proprietorship
• Partnership
• Companies
• Sole Proprietorship
• Partnership
 Partnership

• Partnership in Pakistan are

governed by Partnership Act
1932
 Partnership

• Maximum number of partners

in a partnership is 20.
• Exceptions – Firms of Lawyers,
Doctors, Chartered
Accountants
 Joint and Several Liability

• All liabilities of the business

are the joint and several
responsibility of the
surviving partners in case
of death of one partner.
 Un-Limited Liability

• If the assets of the partnership

are not enough to repay all
debts or liabilities then
personal assets of partners
should be disposed off to
repay the liabilities.
• Companies
 Limited Company

• Companies are formed

under Companies
Ordinance 1984.
Types of Limited Company

• Private Limited Companies

• Public Limited Companies
 Limited Liability

• Liability of individual
shareholder is limited to the
amount of capital contributed
by him.
 Types of Public Limited
Companies
• Listed Companies
• Un-Listed Companies
• Single Member
Companies
• Non-Profit Organizations
 Non-Profit Organizations

• Non-Government Organizations
(NGO’s)
• Trusts
• Societies
• Foundations