Finance Business Resource: Classification of Finance

Classification of Finance

Classification of Finance:

There are basic two types of finance
1. Private finance
2. Public finance

Private finance:
When individuals and organizations are dealing with finance, it is known as private finance. Private finance can be classified into three heads-

A. Personal finance: Personal finance is that class of private finance which deals with the essentials of managing individual’s own money.

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B. Nonprofit organization/non-business finance: Financing activities done by non-profit motive firm is known as non-business finance. The main objective of those firms is to provide service rather making profit. For example- Rotary club, Lions’ club.

C. Business Finance: Business finance is concerned with the financial management of profit seeking business firms which are engaged in the field of trading, manufacturing, servicing and financing. Business finance can be classified into five categories-

1. Sole Proprietorship business finance
2. Partnership business finance
3. Company finance
4. State business finance
5. Cooperative Society finance.  

Public Finance:
Financing by federal, state, local governments and municipal corporations are public finance.