Ways of Corporat finance ... simply


When a person wants to create a project, he needs funding from his own money. The project is called "individual project". When his own resources are insufficient, he resorts to others either to share with him a limited number of people in the form of a "people's company" or by borrowing from a person or a bank.

As the needs of human beings, projects are develop,  and grow in size .they require a large funding to cover the increase in activity . Here, these projects will find it difficult to accumulate funding from a limited number of people. so  shareholding companies are appeared . they divided into equities with equal nominal value, A large number of investors wishing to invest their money, and thus each investor pays a small share of the value of funding for the project and with the increase in the number of investors becomes a large funding required easily accessible.
The shareholding companies have two types .  first closed joint stock companies, in which the number of shareholders is limited and no new shareholders are allowed. The second is a listed shareholding company, which is listed on the stock exchange to facilitate the trading of its shares in the stock market among a large number of shareholders and investors.

When companies need additional financing from non-shareholders, they borrow by means of a bond called "bond". The process of directing the public to finance under the term "financing democracy" in the face of the "finance dictatorship" is called borrowing from banks.

There is a third way to obtain financing in an existing company or institution is to sell one of its assets, which generates a financial flow in the form of income separately from the rest of the assets, and this sale if one party is a regular sale, and if the sale to the masses so that each owns a common share in This asset under a security is securitization.

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