Key Features of Funds
The key features of owned funds are given below:
Provision of risk Capital: Ownership funds provide risk capital because owners bear the risk of loss. In the event of low profits, owners do not get adequate return of their investment. When business is non successful, owners may not be able to recover even their original investment after paying he creditors of business. In case of high profits owners receive goods returns.
Permanent Funds: Ownership funds remain permanently invested in the business. These funds are nonrefundable before the closure of business. Ownership capital is available for all purposes throughout the life of the business.
No Security: Ownership funds can be raised without offering any security of assets.
Separation of Ownership form Management: A company is managed by officers under the supervision and control of board of directors. Directors are elected by the shareholders. Although shareholders are the owners of the company the responsibility of management does not lie with them.