Daily operations in the organizations face numerous difficulties, to resolve these issues laws on different aspects of company law are present. These laws protect the company from damages that can affect the customer segment and good will of the company. This assignment guides in company laws including laws about the capital maintenance, laws on different forms of capital etc.
Different types of capital
Capital is in many forms and becomes the vital source for the establishment of any business. Capital is used by the company for financing its assets, day to day activities and in expansion. Each set of capital has different forms of regulations and laws depending on the country. Every capital type has its pros and cons and selection of the capital is based on the external and internal analysis of the company. Different types of capital include: Working capital, Debt, Equity, Senior debt, Mezzanine debt and other alternatives (Eday, 2013). In Case of Henry he is expanding his business and he needs to consider different types of capital. When farming solutions will be expanded finance will be the major source required for the expansion. Based on these types of capitals, Henry needs to choose the correct type of capital available for the expansion. Equity had inherent risks in it and the laws associated with this type of capital discuss that equity investors are looking for 25% of return. If you are unable to return the amount of investment the investor can take back the finance along with other assets of the company. It is advised to Henry to go for Senior debt because it is not that risky and the lender allows the organization to arrange the profits and interest is applied on a scheduling period.