Published by: BhumiRaj Timalsina
Published date: 19 Jan 2022
Public enterprise is a business organization established by the government holding more than 50% of the total share with the aim of producing and distributing goods and services at a reasonable price to the public. Public enterprises are established by the government contributing total or majority capital. The government invests at least 51 percent of the total amount of paid up capital. It is managed by the government nominating board of directors or representatives. It is an industrial or commercial undertaking, which involves in the production and distribution of goods and services in order to meet its expenses. It maintains its accounts independently. It is a distinct legal entity having a corporate status. It has a perpetual life with limited liabilities. It uses a common seal as its official signature. It is established for the public service and welfare, sound industrial and commercial base and upliftment of economy of the country.
The following are some of the main definitions of a public enterprise:
"Public enterprises are established, controlled and operated by the government to produce and supply goods and services to the society."- A.N. Agrawal
"State-owned enterprises are finally autonomous and legally distinct entities wholly or partly owned by central or sub- national governments." - World Bank Report- 1998"
"Public enterprises are established, control and operated by the government to produce and supply goods and services to the society." - A.N Hansen
The following are the main characteristics of a public enterprise: