What Are the Different Types of Corporate Funding?

Corporate funds refer to funds in which ownership and use rights belong to the enterprise. The funds of state-owned enterprises belong to the state. Since the reform of the corporate financial system in 1978, state-owned enterprises have withdrawn funds from corporate funds, retained profits, and retained profits after taxes. Enterprises have a certain amount of control over their own operations. The state cannot arbitrarily recover and allocate them free of charge. Although this part of the funds is also state funds, relatively speaking, great changes have taken place in the nature of the sources. ^[1]

Corporate funds

Corporate funds refer to funds in which ownership and use rights belong to the enterprise. The funds of state-owned enterprises belong to the state. Since the reform of the corporate financial system in 1978, state-owned enterprises have withdrawn funds from corporate funds, retained profits, and retained profits after taxes. Enterprises have a certain amount of control over their own operations. The state cannot arbitrarily recover and allocate them free of charge. Although this part of the funds is also state funds, relatively speaking, great changes have taken place in the nature of the sources. ^[1]

(I) Materiality of enterprise funds ^[2]

There are different classifications of corporate funds. According to the source of funds, it can be divided into: enterprise capital and borrowed funds; according to the field of sports: circulating funds, production funds; according to functional forms: monetary funds, production funds, commodity funds; according to the circulation method and The role is divided into: capital of production funds, labor compensation funds; production funds can be divided into fixed funds and working capital according to their value turnover methods. Under the conditions of a socialist market economy, funds, like capital, must continue to move in order to achieve multiplication. Marx's analysis of individual capital movements in capitalist society is also applicable to the capital movement of socialist enterprises. ^[3]

Under the conditions of commodities and monetary economy, the production process of industrial enterprises is not only a labor process in which laborers use labor materials such as machinery and equipment to act on raw materials such as raw materials to produce industrial products with value, but also products. The process of value formation and realization. Therefore, the labor materials and labor objects required by industrial production not only exist in physical form, but also in the form of value. They must also be used to build and purchase labor data, purchase labor objects, pay labor compensation, and other expenses. Otherwise, production cannot proceed. The monetary performance of the value of materials and the currency itself (monetary funds) in the process of enterprise reproduction are the production and operation funds of the enterprise, and are the main components of enterprise funds. In addition, in order to meet the needs of production and development and the material and cultural life of employees, the company withdraws various special funds from within in accordance with the provisions of the national financial system, obtains special appropriations from the national finance and special loans from the state bank, thereby forming special funds for the enterprise, Become another component of corporate funds. The production and operation funds and special funds owned by the enterprise are all the funds of the enterprise. They are used by people to organize and realize the reproduction of products. ^[4]

The movement of corporate funds must go through three stages of purchase, production, and sales in the process of reproduction. In line with the above three stages, corporate funds take three forms: monetary funds, production funds, and commodity funds. And sales functions to create and realize value. After three types of corporate funds have been realized and the value has increased, they have returned to their original starting point. This movement process constitutes a circulation of corporate funds. ^[3]