2.1 Own financing

Own financing are more stable resources available to the company, since not been back in the life of the same. on the other hand, are those who are at increased risk because, in the event of bankruptcy, partners are the latest een receive the share of the liquidation of the company, since, firstly must attend all creditors.

Own resources can be divided into two categories: own resources own resources with self-financing or internal character and external character.

Own resources with external carácter

It is composed of share capital, the share capital enlargements and subsidies granted by Public Authorities.

• Social capital the consists of the contributions of the partners forming the society and, moreover, by the successive capital increases that may occur. The contributions of capital may come from individuals, companies, groups of companies, or, in the case of some SMEs and temporary form of venture capital risk (SCR).
  
  
• Subsidies granted by public authorities. They are funds that receives the company free intended for the promotion of a particular activity.

Own resources with internal or self-financing character

Consists of funds that are generated in the company as a result of its activity. Two types of self-financing are for enrichment and for maintenance:

• Reservations are not distributed by the company benefits. The benefits are obtained from the result, which is achieved as a result of the development of its activity. Reservations can be of different types: legal, when their amount is fixed by law; statutory, when they are fixed by the bylaws of the company; and voluntary, when they are determined by extraordinary gains. Reserves allow the company to make new investments and, therefore, to support the growth.
  
  
• Amortisation is calculated according to the value that you are losing assets in the production process. Assets of fixed assets lose value by the use which is made of them in the production process (and which makes physically wear), either by its technical and functional obsolescence due to technological changes that occur. When you end an economic exercise, estimated the loss of value which has occurred in the fixed assets of the company and is incorporated into the value of the product as you unciste than you will be charged in the amount of the sale. As the years pass, the sinking fund will be increased to the extent that have depreciated assets, so that, at the end of the economic life of these, the company can replace them by making use of the money accumulated in the Fund.
• Provisions are also a part of the result of the company, that creates a fund to deal with certain losses which were still to be produced, either future expenditures. For example, loss of the securities, funds for compensation, payment of taxes, etc.

Self-financing Advantages/ Disadvantages

Self-financing presents some advantages for the company, such as:

• It gives the company more autonomy and freedom of action.
• For SMEs it is virtually the only way of obtaining long-term financial resources.
• It provides liquidity to the company without having recourse to the capital market.

Among the disadvantages of the self-financing we can highlight:

• It reduces dividends (distribution of profits) and, therefore, the profitability that partner perceives for his contribution of capital.
• In the absence of an explicit cost, there is a danger that is used on uneconomic investments.
• It occurs gradually and slowly.
• Depreciation and provisions funds, unlike stocks, do not represent a growth for the company, but they represent a self-financing of maintenance.

When the company arrives at the end of the fiscal year, gets a result of activity that has taken place. This result, a part is devoted to amortization of fixed assets endowments and endowments of provisions for foreseeable losses, the loss of value stocks, defaulters, etc.; another part goes to the payment of the tax on profits; another, to the remuneration of the owners of the company in the form of dividends; and the rest to the reserves of the company.

The dividend is the fraction of the benefits of a company or society that recognizes partners as periodic remuneration of the capital that has been invested.