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Class : 11
Unit : Business


Explain the characteristic of public enterprises.

Ans : The important characteristic of public enterprises are explained below: i) Government ownership:- Public Enterprises are established under the ownership of the government or at least 51% of total shares or total hundred percent share are held by the government. ii) Government management and control:- Government earned 51% of total shares or totally 100% of shares. So it is fully owned by government. Government authorities take active part in management and control of public enterprises. iii) Separate legal entity:- Public enterprises have separate legal entity. It is established in its own name. It can hold property; it is only if its own name it is created by law and dissolved by the law. iv) Perpetual succession:- Perpetual sensation is another important feature of public enterprises. It is not affected by death, change government policy in its regular business activities. It can be dissolved only after completion of certain legal proceedings. v) Service motive:- The concept of public enterprises is developed in the principal to provide goods and services to the public at minimum cost. The main motive is to provide render service to the general people at reasonable price list of secondary motive based on minimum profit to meet higher expenditure. vi) Monopoly in business:- Some public enterprises have Monopoly power India on sector of business. Public enterprises involves in sector near private undertaking do not show interest in the initial stage due to use investment and low rate of return full list of public enterprises have Monopoly power in business like Nepal oil Corporation, Nepali electricity authority. vii) Public accountability:- It is accountable to the general public. The board of directors and executives of the enterprises are accountable for their performance to the parliament. viii) Maturity in decision:- At the time of taking measure decision, many specialist and professionals provide suggestions and guidance. Generally, decision is taken by your management committee. We can say that there is measure majority in the decision of public enterprises maturity.
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