Public and private enterprises

1. QUEENS’ COLLEGE
SESSION : 2011-12
SUBJECT : B.STUDIES
PRIVATE,PUBLIC AND GLOBAL
ENTERPRISES
GUIDED BY:SHALINI MA’AM
MADE BY : PURVASHI VERMA
CLASS : XI ‘C’
ROLL NO. : 11328

2. 1. ACKNOWLEDGEMENT
2. INTRODUCTION
3. CHARACTERISTICS
4. TYPES OF BUSINESS ACTIVITIES
5. PUBLIC ENTERPRISES
6. GLOBALISATION
7. MULTINATIONAL COMPANIES
8. JOINT VENTURES
9. JOINT SECTOR ENTERPRISES
10. PRIVATE ENTERPRISES

3. ACKNOWLEDMENTACKNOWLEDMENT
I have been privileged by Mrs. Shalini , as she has given me the I have been privileged by Mrs. Shalini , as she has given me the
task of making a project.task of making a project.
Working on the project was a very difficult task but of course Working on the project was a very difficult task but of course
without any question it has widened my views. I felt a heavy without any question it has widened my views. I felt a heavy
delight, working on the project.delight, working on the project.
Though I did not claim for the originality of the matter but I tried Though I did not claim for the originality of the matter but I tried
my best on the whole project. This project is the cummulative my best on the whole project. This project is the cummulative
result of thorough study. The help of various textbooks and result of thorough study. The help of various textbooks and
references made this difficult task a feather light.references made this difficult task a feather light.
Thank you…Thank you…

4. BUSINESS UNDERTAKINGS

5. INTRODUCTION
A business undertaking is an institutional
arrangement to conduct any type of business activity.
The undertaking maybe run by one person or
association of persons. It may be based on formal or
informal agreement among persons who undertake to
run the concern. According to Wheeler, a business
undertaking is "a concern, company or enterprise
which buys and sells, is owned by one person or a
group of persons and is managed under a specific set
of operating policies." The persons join together and
pool their resources and conduct the activities of the
undertaking for the benefit of all.

6. I. Separate Entity
II. Separate Ownership
III. Separate Management
IV. Independent Risk Bearing
V. Exchange of Goods and Services
VI. Dealing in Goods and Services
VII.Profit Motive
VIII.Continuity of Transactions
IX. Risk and Uncertainly
X. Social Responsibility

7. %)"TB .* 'BP+TBB '+ T%,-P+B
TYPES OF BUSINESS UNDERTAKINGSBP.T ,BPB
SIZE BASIS+,%'T .* ,#%PP%PTB NATURE OF ACTIVITIES./ +TB0P" OWNERSHIPB,11 T+%U
SMALL ENT.T P' T+%U MEDIUM ENT.1,T T+%U LARGE ENT.P+ 'B%P,1 T+%U
INDUSTRIAL ENT.%, P+ T+%U TRADING ENT.BTP#TB T+%U SERVICES ENT."P,%T BT#%.
PRIVATE SECTOR"'1P# BT#%. PUBLIC SECTOR2.P+% BT#%. JOINT SECTOR

8. P+ P,+ T#.+.)
INDIAN ECONOMY"'1P# BT#%.
PUBLIC SECTOR"P,%T BT#%. PRIVATE SECTORCRS…LB.RUB…
EUCRLB…PU
DEPARTMENTAL
UNDERTAKINGSB…BEBIL
NILSIL…BPIU
STATUTORY
CORPORATIONIRLU.RUB…
EUCRLB…PU
GOVERNMENTAL
UNDERTAKINGSIR SLISLPRBILPS
SOLE PROPRIETORSHIPS…LBURLPS
PARTNERSHIPIPUB PUCE NI.S…U
JOINT HINDU COMPANYNIISRL…BPR INPRB
COOPERATIVE SOCIETYNI.S…U
COMPANY.EBPU…BPIU… NI
MULTINATIONAL CO.

9. PUBLIC SECTORPUBLIC SECTOR
ENTERPRISESENTERPRISES

10. PUBLIC ENTERPRISES…..

A public sector enterprise or a public
enterprise is one which is owned, managed
and controlled by the Central Government
or any State Government or any local
authority.
They are also known as ‘Public
Undertakings. The forms of organizing
public enterprise are : Departmental
undertakings, Public Corporations,
Government Companies.

11. PUBU LIBCELC ENNTR
PUBU LIBCELC ENNTR
S….C NNEI LTBNNILIBSBCEIE
S….C NNEI LTBNNILIBSBCEIE
CHARACTERISTICS OFCHARACTERISTICS OF
PUBLIC SECTOR ENTERPRISESPUBLIC SECTOR ENTERPRISES ELULINNTIBEPCS
STATE OWNERSHIPB%,%T #.+%.1
STATE CONTROLELULINNRCU C
STATE FINANCINGET CTI TTC NNT.I LCIE
SOCIO-ECONOMIC OBJECTIVESS….C NNU T…LU.CCL
PUBLIC ACCOUNTABILITY

12. State OwnershipState Ownership - Public Sector enterprises are owned by - Public Sector enterprises are owned by
Central or State Government or jointly by both or Local Central or State Government or jointly by both or Local
authority.authority.
State ControlState Control – The rights of its management vest in the – The rights of its management vest in the
Government. The majority of the directors and top officials Government. The majority of the directors and top officials
are appointed by the government for the management of are appointed by the government for the management of
such enterprises.such enterprises.
State FinancingState Financing – The whole or major source of financing – The whole or major source of financing
such enterprises is the government. The funds are supplied such enterprises is the government. The funds are supplied
from the government treasury or budget of the concerned from the government treasury or budget of the concerned
Ministry Department or investory by government in the Ministry Department or investory by government in the
share capital of the enterprises.share capital of the enterprises.

13. 4. Socio-economic Objectives – Such enterprises are guided by
both the profit and social objectives for the benefits of the
community as a whole such as:

* to set up basic and strategic industries (like steel and oil).
* to promote balanced regional development through the growth
of economic activity in backward, rural and remote areas of
country.
* to ensure adequate supply of essential goods at a fair price.
* to check the growth of monopoly and monopolistic tendencies
in the private sector.
5. Public Accountability – Such enterprises are accountable to the
public through the government. Their performance is subject to
scrutiny of the Parliament or State Legislatures and is
evaluated by the committee on Public Undertakings or Public
Accounts Committee or Estimates Committee. Their reports are
presented for discussion in Parliament or State Assembly.

14. OBJECTIVES OF PUBLIC ENTERPRISES
To achieve rapid economic development.
To channelise resources.
To ensure balanced regional development.
To prevent concentration of economic power.
To prevent the growth of monopoly.
To control the prices of essential goods.
To secure public welfare.
To reduce inequalities in income distribution.
To provide satisfactory employment.
To mobilise savings through financial
institutions to meet demands of public and
private enterprises.

15. T,B.+B *. .T+T+%
T,B.+B *. .T+T+%
",%P#P",%P.+ P+ 'BP+TBB
",%P#P",%P.+ P+ 'BP+TBB
REASONS FOR GOVERNMENTREASONS FOR GOVERNMENT
PARTICIPATION IN BUSINESSPARTICIPATION IN BUSINESS"1,++T
TT1."T+%
PLANNED
DEVELOPMENTP+*,B%'#%',1
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DEVELOPMENTT+T,%P.+ .*
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GENERATION OFGENERATION OF
EMPLOYMENT EMPLOYMENT B.#P,1
B.#P,1
/T1*,T
/T1*,T
SOCIALSOCIAL
WELFAREWELFARE PB%P'%P.+ .*
PB%P'%P.+ .*
T#.+.P# ,P+B
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DISTRIBUTION OFDISTRIBUTION OF
ECONOMIC GAINSECONOMIC GAINS
+TT *.
+TT *.
+,%P.+,1PB,%P.+
+,%P.+,1PB,%P.+
NEED FOR NEED FOR
NATIONALISATIONNATIONALISATION

16. *.B .*
*.B .*
"'1P# T+%T"PBTB
"'1P# T+%T"PBTB
FORMS OFFORMS OF
PUBLIC ENTERPRISESPUBLIC ENTERPRISES T",%T+%,1
T",%T+%,1
'+ T%,-P+B
'+ T%,-P+B
DEPARTMENTALDEPARTMENTAL
UNDERTAKINGSUNDERTAKINGS

"'1P#
"'1P#
#.".,%P.+
#.".,%P.+
PUBLIC PUBLIC
CORPORATIONCORPORATION
.T+T+%,1
.T+T+%,1
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#.",+)
GOVERNMENTAL GOVERNMENTAL
COMPANYCOMPANY

17. DEPARTMENT UNDERTAKINGS
Departmental Undertaking is a public
enterprise which is organised, controlled and
managed by the government in the same way
as any other government department.
Example :
Railways,
Post and Telegraphs,
Public works Department(PWD),
Ordnance factories.

18. 1.Formation : Departmental Undertaking is created by the government
and is attached to a particular ministry.
2.No Separate legal Entity : It is not a separate legal entity. It cannot
sue and cannot be sued without government’s consent.
3.Management & Control : It is managed and controlled by the
concerned ministry of the government.
4.Finance : It is wholly financed by the government out of budgetary
appropriations.
5.No Borrowing Powers : It has no powers to borrow.
6.No Authority to use Revenue : It has no authority to use its
revenues. Its revenues are paid into treasury.

19. PUBLICENCTCRPSTUL P…LT.C…RPULTB…I
PUBLICENCTCRPSTUL P…LT.C…RPULTB…I
MERITS OF A DEPARTMENTAL UNDERTAKINGSMERITS OF A DEPARTMENTAL UNDERTAKINGSPTIC
PTIC
LECNEU
LECNEU
EASY EASY
TO FORMTO FORMPTI
PTI
NB…T…B…
NB…T…B…
EASYEASY
FINANCINGFINANCINGIPUP
IPUP
SECRECYSECRECYTE…LTB.P
TE…LTB.P
LECSPES.P
LECSPES.P
ACCOUNTABILEACCOUNTABILE
TO PEOPLETO PEOPLE

20. PUPBLICENTERE PSRBIUP…IR.E… PBIRL…C
DEMERITS OF A DEPARTMENTAL UNDERTAKINGS.RENTE
T.PLL.LI
LACK OF
FLEXIBILITY.NE
PTTLLP…
LOW
EFFICIENCYL P E
SN.LILR.
N…CL PBRILN…C
GUIDED BY
POLITICAL
CONSIDERATIONS.RENT
E UR…RPUP…I
LACK OF
MANAGEMENTE .RENTE
L
PLCLN…EURL…
LACK OF
QUICK
DECISION MAKING.RENT
RIN…NU
LACK OF
AUTONOMY

21. PUBLIC CORPORATION
Public corporation is an autonomous organisation Public corporation is an autonomous organisation
which is established by a special Act of the which is established by a special Act of the
Central or State Legislatures. This Special Act Central or State Legislatures. This Special Act
defines its powers, duties, functions, immunities defines its powers, duties, functions, immunities
and the pattern of management. It is also known and the pattern of management. It is also known
as Statutory Corporation.as Statutory Corporation.
ExampleExample : :
Life Insurance corporation,Life Insurance corporation,
Indian Air Lines,Indian Air Lines,
Air India,Air India,
State Bank of India,State Bank of India,
Oil and Natural Gas Commission.Oil and Natural Gas Commission.

22. 1.Formation : Public Corporation is created by a special Act of Central or State
Legislature.
2.Separate Legal Entity : Like a company, it has a separate legal entity. It can sue
and be sued.
3.Management & Control : It is managed by the Board of Directors.
4.Finance : it is wholly financed by the government.
5.Borrowing Powers : It has powers to borrow funds from government as well as
public.
6.Authority to use Revenue : It has authority to use its revenue to meet its
expenditure.
7.Budgeting and Audit : It has powers to prepare its own budgets.
8.Accountability : It is accountable to the public through concerned legislatures.
9.Public Service Motive : Its primary motive of formation is public service and not
earning profit.

23. PUBLICENCT
PUBLICENCT
RS….B
RS….B
EUREUTLBEI
EUREUTLBEI
MERITS OF AMERITS OF A
PUBLICPUBLIC
CORPORATIONSCORPORATIONSPTICLECUTBIPCNSI
PTICLECUTBIPCNSI
EASY TO RAISE FUNDSEASY TO RAISE FUNDSERPUTLBET.CTSLEE
ERPUTLBET.CTSLEE
OPERATIONAL AUTONOMYOPERATIONAL AUTONOMYEUICBLCIPUBPC ELBP
EUICBLCIPUBPC ELBP
WORKS WITH SERVICE MOTIVEWORKS WITH SERVICE MOTIVETESLT…B.BL
TESLT…B.BL
ACCOUNTABILITYACCOUNTABILITYN.PB…B.BL
N.PB…B.BL
FLEXIBILITYFLEXIBILITY

24. PUBLICENCTRS…B.C.EUTEULBEC
PUBLICENCTRS…B.C.EUTEULBEC
MERITS OF PUBLIC CORPORATION MERITS OF PUBLIC CORPORATION ….CEN
….CEN
RLEE CB
RLEE CB
TU.LB.P
TU.LB.P
LACK OFLACK OF
AUTONOMY INAUTONOMY IN
PRACTICEPRACTICERUPITEIBP
RUPITEIBP
LEUI
LEUI
.EIR PUI
.EIR PUI
UNRESPONSIVEUNRESPONSIVE
TOWARDSTOWARDS
CONSUMERSCONSUMERSBNNB.R…LCB
BNNB.R…LCB
.UBC
.UBC
LPC.L
LPC.L
DIFFICULTY INDIFFICULTY IN
CHARGING CHARGING
THE ACTTHE ACT

25. GOVERNMENT COMPANY

A government company is a company which at least 51 % of
the paid up share capital is held by:
(a) the Central Government
(b) any State Government
(c) Partly Central Government and partly State Government (s).
Government company includes a company which is a
subsidiary of such a company.
Example :
State Trading Corporations (STC),
Hindustan Machine Tools (HMT),
Maruti Udyog Ltd.

26. 1.Formation : It is formed by complying with the provisions of The
Company Act, 1956.
2.Separate Legal Entity : Like any other company, it has a separate legal
entity.
3.Management & Control : It is managed by the Board of Directors. The
members are nominated by the government and elected by the
shareholders.
4.Ownership : At least 51% of the share capital is held the Central or
state Government or by both.
5.Staffing and terms of service : Its employees are not civil servants.
They are appointed by the company on its own terms and conditions.
6.Finance : It can raise funds from government or public.
7.Power to use revenues : It has power to use revenues.

27. 8.8.Operational AutonomyOperational Autonomy : It runs an Commercial : It runs an Commercial
principles like, private enterprise and enjoys higher principles like, private enterprise and enjoys higher
degree of freedom from government interference. degree of freedom from government interference.
It can frame its own rules and regulation to govern It can frame its own rules and regulation to govern
its internal management.its internal management.
9.9.Annual ReportsAnnual Reports : Its annual reports and accounts : Its annual reports and accounts
along with the audit reports are to be presented to along with the audit reports are to be presented to
the legislatures as per The Companies Act.the legislatures as per The Companies Act.
10. 10. Appointment of AuditorsAppointment of Auditors : Its auditors are : Its auditors are
appointed by the government on the advice of appointed by the government on the advice of
Comptroller and Auditor General of India (CAG).Comptroller and Auditor General of India (CAG).
11. 11. Borrowing PowersBorrowing Powers : It has powers to borrow. : It has powers to borrow.

28. PUBLICENCTCRESPU… P…LC.E T…
MERITS OF A GOVERNMENT COMPANYPTICLECNEU
EASY TO FORMNPBBBLCENCUTBIB…RC.TBLT
FLEXIBILITY OF RAISING CAPITALEPUTLBE…TCNPBBBL
OPERATIONAL FLEXIBILITYPTICLECT P…CE. P…LI
EASY TO AMEND DOCUMENTSNT.BBLTLPICUBSTLPCTULB.BTLBE…
FACILITATES PRIVATE PARTICIPATION

29. '$-"2R3URR536-7$72R3$…78
DEMERITS OF A GOVERNMENT COMPANY9R3U
3:72&""28
LACK OF
ACCOUNTABILITY9R3UR
372"7:"28R"7
…3""R%R$5$2P
LACK OF
CONTINUITY IN
POLICIES & MGMT.U-R3UR…:&"
R 3:72&""28
FEAR OF PUBLIC
ACCOUNTABILITY&7R3U
-R:2373$8
ABSENCE OF
REAL AUTONOMY9R3U
…-3U"37
R ;…-"7
LACK OF
PROFESSIONAL
EXPERIENCE

30. CHANGING ROLE OF PUBLIC
SECTOR
Despite the considerable role in the economic development of the country, the
public sector has its ills and these are many. For instance over 100 of the 242
Central Public sector Undertakings are loss making units with many of them
terminally sick. In the present era of globalisation and liberalisation, it is required
to bring reforms in public sector undertaking. The government has realised the
need of reforming the public sector undertakings.
Reforming, Public Sector Enterprise is neither a simple nor uniform process.
Each enterprise is different from the other. The objectives are often different
and for these reasons it is required to do different reform measure.
The measures for reforming the Public Sector Enterprise are broadly divided
into following.
1.Reforming Public Sector Enterprises by signing Memorandum of Understanding
(MOU).
2.Green field Privatization
3.Reforming Public Sector Enterprises by selling their assets either partially or
wholly to the private sctor or to the general public.

32. GLOBALIZATION
Globalization is the system of
interaction among the countries of
the world in order to develop the
global economy. Globalization refers
to the integration of economics and
societies all over the world.
Globalization involves
technological, economic, political,
and cultural exchanges made possible
largely by advances in
communication, transportation, and
infrastructure.

33. EFFECTS OF GLOBALIZATION
• Improvement of International Trade.
• Technological Progress.
• Increasing Influence of Multinationals.
•  Power of the WTO, IMF, and WB.
•   Greater Outsourcing of BPO’S.
• Greater Mobility of Human Resources.
• Civil Society.

34. DRAWBACKS OF GLOBALISATIONDRAWBACKS OF GLOBALISATION
•Increased flow of skilled and non-skilled jobs from developed to
developing nations as corporations seek out the cheapest labour.
•Corporate influence of nation-states far exceeds that of civil society
organizations and average individuals.
•Greater risk of diseases being transported unintentionally between
nations
•Spread of a materialistic lifestyle and attitude International bodies
like the World Trade Organization infringe on national and individual
sovereignty
•Increase in the chances of civil war within developing countries and
open war between developing countries as they vie for resources
•Decreases in environmental integrity as polluting corporations take
advantage of weak regulatory rules in developing countries 

35. MULTINATIONAL COMPANIES

36. MULTINATIONAL COMPANIES
A multinational corporation is a
corporation that has its facilities and
other assets in at least one country other
than its home country. Such companies
have offices and/or factories in different
countries and usually have a centralized
head office where they co-ordinate global
management.
Very large multinationals have budgets
that exceed those of many small
countries. 

37. PT R.PICENC
S.LBTLBET.CE RTBPI
EXAMPLES OF
MULTINATIONAL COMPANIESBNEII
INFOSYS…B..T…E
BILLABONGIE
SONYNEU
FORDTUB..
KARGILLT T
AMWAY

38. FEATURES OF MNC’sFEATURES OF MNC’sFEATURES OF MNC’sFEATURES OF MNC’s
1. huge amount of capitalhuge amount of capital
2. large sized plant and machinery2. large sized plant and machinery
3. various activities3. various activities
4. expansion on large scale4. expansion on large scale
5. professional management5. professional management
6. advance technology6. advance technology
7. market expansion7. market expansion
8. profit is the main objective8. profit is the main objective
9. control of head office9. control of head office
10. creation of new project10. creation of new project
1. huge amount of capitalhuge amount of capital
2. large sized plant and machinery2. large sized plant and machinery
3. various activities3. various activities
4. expansion on large scale4. expansion on large scale
5. professional management5. professional management
6. advance technology6. advance technology
7. market expansion7. market expansion
8. profit is the main objective8. profit is the main objective
9. control of head office9. control of head office
10. creation of new project10. creation of new project

39. BENEFITS OF MNC’s
raining of local labor with more sophisticated
techniques which on the long run will bring
external benefits to the host country when these
techniques can be used in all economic sector.
raise the growth rate of host nation by
introducing new investment and new technology.
induce their local rivals to become more
innovative and competitive.
promote improvement or development to various
supporting industry or complementary
industries 
contributions of taxation, plus providing the host
country with foreign exchange that can be used to
purchase vital imports.

40. MNC may enjoys high competitive advantages over local firms that
can destroy local competition rather than promote it.
they can require their subsidiaries to operate polices that may be
inefficient or create distortion in local market 
they may misuse the environment 
they may create uncertainty because foreign firms control the
country within it by controlling part of its industries.
they may not promote any development for the nation's economic
activities by simply source their components from abroad. which
means the they will drive local producers out of business.
avoid tax by practicing transfer pricing.

41. JOINT
VENTURES

42. JOINT VENTURES
A contractual agreement joining together
two or more parties for the purpose of
executing particular business undertaking.
All parties agree to share in
the profits and losses of the enterprise.

43. BENEFITS OF JOINT VENTURE
•Provide companies with the opportunity to gain new capacity
and expertise
•Allow companies to enter related businesses or new
geographic markets or gain new technological knowledge
•access to greater resources
•sharing of risks with a venture partner
•Joint ventures can be flexible. For example, a joint venture
can have a limited life span and only cover part of what you
do, thus limiting both your commitment and the business'
exposure.

44. PUBLI CENTERNS….E …. C
EXAMPLES OF JOINT VENTURESCN…E SCCN…
SONY ERICSSONNIU. EU…ELUIBNIS
COLGATE AND PALMOLIVSS…EBNSI ES…SUEISBS.
VIRGIN MOBILE INDIA LIMITED… NEIST ES…CU…
NEWYORK LIFE INSURANCE

45. DRAWBACKS OF JOINT VENTURE
•It takes time and effort to build the right relationship and partnering It takes time and effort to build the right relationship and partnering
with another business can be challenging. Problems are likely to with another business can be challenging. Problems are likely to
arise ifarise if
•The objectives of the venture are not 100 per cent clear and The objectives of the venture are not 100 per cent clear and
communicated to everyone involved.communicated to everyone involved.
•There is an imbalance in levels of expertise, investment or assets There is an imbalance in levels of expertise, investment or assets
brought into the venture by the different partners.brought into the venture by the different partners.
•Different cultures and management styles result in poor integration Different cultures and management styles result in poor integration
and co-operation.and co-operation.
•The partners don't provide enough leadership and support in the The partners don't provide enough leadership and support in the
early stages.early stages.
•Success in a joint venture depends on thorough research and Success in a joint venture depends on thorough research and
analysis of the objectives.analysis of the objectives.

46. JOINT SECTOR
ENTERPRISES

47. JOINT SECTOR ENTERPRISESJOINT SECTOR ENTERPRISES
A joint sector enterprises is one which is A joint sector enterprises is one which is
owned, managed and controlled jointly by owned, managed and controlled jointly by
the private entrepreneurs and the the private entrepreneurs and the
government. For example, Cochin government. For example, Cochin
Refineries, Gujarat State Fertilizers Refineries, Gujarat State Fertilizers
Company. Such enterprises are organized to Company. Such enterprises are organized to
encourage private entrepreneurs to encourage private entrepreneurs to
participate in industrial development jointly participate in industrial development jointly
with the government. with the government.

48. PUBU LIBCELC ENNTRN
PUBU LIBCELC ENNTRN
STC…LNNEI LTBNNI…LIB.BCEIE
STC…LNNEI LTBNNI…LIB.BCEIE
CHARACTERISTICS OF CHARACTERISTICS OF
JOINT SECTOR ENTERPRISESJOINT SECTOR ENTERPRISES PUBLI UCLENTRBS
PUBLI UCLENTRBS
JOINT OWNERSHIPJOINT OWNERSHIP PUBLICEBENTCTBL
PUBLICEBENTCTBL
JOINT MANAGEMENTJOINT MANAGEMENT PUBLIRUBEBSUBN
PUBLIRUBEBSUBN
JOINT FINANCINGJOINT FINANCING…PSUP.TSPBPCUSIP TSLUT…
…PSUP.TSPBPCUSIP TSLUT…
SOCIO-ECONOMIC OBJECTIVESSOCIO-ECONOMIC OBJECTIVES PUBLIESSPBLEUUL
PUBLIESSPBLEUUL
JOINT ACCOUNTABILITYJOINT ACCOUNTABILITY

49. CHARACTERISTICSCHARACTERISTICS
Joint OwnershipJoint Ownership : Joint sector enterprises are : Joint sector enterprises are
owned by private entrepreneurs and the owned by private entrepreneurs and the
government.government.
Joint ManagementJoint Management : Such enterprises are mainly : Such enterprises are mainly
managed by private entrepreneurs.managed by private entrepreneurs.
Joint FinancingJoint Financing : Such enterprises are financed : Such enterprises are financed
jointly by private entrepreneurs and the jointly by private entrepreneurs and the
government. The proportion of capital to be government. The proportion of capital to be
continued is decided by mutual consent.continued is decided by mutual consent.
Socio-Economic ObjectivesSocio-Economic Objectives : Such enterprises : Such enterprises
are guided by both the profit and social are guided by both the profit and social
objectives.objectives.
Joint AccountabilityJoint Accountability : Such enterprises are : Such enterprises are
accountable both to the private entrepreneurs and accountable both to the private entrepreneurs and
the government.the government.

51. P U B L I C E N C T I R P E
P U B L I C E N C T I R P E
C S I C P P U N C N
C S I C P P U N C N
PRIVATE SECTOR PRIVATE SECTOR
ENTERPRISESENTERPRISES
A private sector enterprise or a private A private sector enterprise or a private
enterprise is one which is owned, managed and enterprise is one which is owned, managed and
controlled by private entrepreneurs. For controlled by private entrepreneurs. For
example, business houses managed by Tata example, business houses managed by Tata
such as TELCO, TISCO, TATAPOWERS, such as TELCO, TISCO, TATAPOWERS,
business houses managed by Birlas such as business houses managed by Birlas such as
Century,MPRL, Birla Yamaha, Grasim Century,MPRL, Birla Yamaha, Grasim
Industries, business houses managed by Industries, business houses managed by
Ambanies such as Reliance Industries, Reliance Ambanies such as Reliance Industries, Reliance
Petroleum, Reliance Capital etc….Petroleum, Reliance Capital etc….

52. PUBU LIBCELC ENTRN
SBC…ULINEI LTBNI.LIBSBCEIE
CHARACTERISTICS OF
PRIVATE SECTOR ENTERPRISESSBC…ULINNT.IBEPCS
PRIVATE OWNERSHIPSBC…ULINNRC.U. C.
PRIVATE FINANCINGSBC…ULINNU.UII.L
PRIVATE MANAGEMENT SBC…ULINNU T.LUCCL
PRIVATE ACCOUNTABILITYSBTRCLNNTI LC…I
PROFIT OBJECTIVE

53. •Private OwnershipPrivate Ownership : These enterprises are owned
by private entrepreneurs.
•Private ManagementPrivate Management : The rights of management
vest in the owner but professionals can be
employed for the efficient management of such
enterprise.
•Private FinancingPrivate Financing : Such enterprises are financed
by the private entrepreneurs.
•Profit ObjectiveProfit Objective : Such enterprises are mainly
guided by profit objective.
•Private AccountabilityPrivate Accountability : Those who manage such
enterprises are accountable to the owners for the
performance of such enterprises.
CHARACTERISTICS

54. SOLE
PROPRIETORSHIP

55. SOLE PROPRIETORSHIP
'Sole' means single and 'proprietorship' means
ownership. It means only one person or an
individual becomes the owner of the business.
Thus, the business organisation in which a
single person owns, manages and controls all
the activities of the business is known as sole
proprietorship form of business organisation.
The individual who owns and runs the sole
proprietorship business is called a ‘sole
proprietor’ or ‘sole trader’. A sole proprietor
pools and organizes the resources in a
systematic way and controls the activities with
the sole objective of earning profit.

56. 1.Single Ownership
2.No sharing of Profit and Loss
3.One-man’s Capital
4.One-man Control
5.Unlimited Liability
6.Less legal formalities

57. ADVANTAGES
Easy to Form and Wind up
Direct Motivation
Quick Decision and Prompt Action
Better Control
Maintenance of Business Secrets
Close Personal Relation
Flexibility in Operation
Encourages Self-employment

58. LIMITATIONS
 Limited Capital
 Unlimited Liability
 Lack of Continuity
 Limited Size
 Lack of Managerial Expertise:

59. PARTNERSHIP

60. PARTNERSHIP
A legal contract entered into by two or
more persons in which each agrees
to furnish a part of the capital and
labor for a business enterprise, and
by which each shares a fixed
proportion of profits and losses.

61. FEATURES
 Formation according to the Partnership Act of 1932.

 Financing with the help of partners.
 All have right to take part in Management .
 Restriction on Transfer of Interest, no partner can transfer the
interest.
 Unlimited Liability of Partners.
 Duration is according to the type of partnerships.
 Taxation.

 Implied Authority.

62. ADVANTAGES
Easy to set up.
More capital can be brought into the business.
Partners bring new skills and ideas to a
business.
Decision making can be much easier with more
brains to think about a problem.
Partners share responsibilities and duties of the
business.
Division of labour is possible as partners may
have different skills.

63. LIMITATIONS
oInstability of the firm.
oLimited resources due to restriction
maximum membership.
oUnlimited liability.
oScope for friction and quarrel.
oNo continuity.

64. JOINT HINDU
FAMILY BUSINESS

65. JOINT HINDU FAMILY
Joint Hindu Family Business is a different type of
organization, which is found only in India. As the
name suggests, it is type of organization in which
all the members of Hindu Undivided Family
manage and control the business with the direction
of head of the family.
It is not a Partnership. It is just like a Partnership
where only the members of the family can take
part. It is not even sole trading concern, but it is
enlargement of sole trading concern in which
continuity is guaranteed. The business is carried
on from generation to generation. It comes into
existence by the operation of Hindu law.

66. FEATURES
Comes into existence by Hindu Law.
No outside membership. Male members up to three
successive generations of a family own the business jointly.
The senior most co-parcener, known as KARTA has the
implied authority to run the business.
Even if the co-parceners have equal share, it fluctuates
with every birth and death of a male in the family.
The liability of the members are limited to the extent of
their share but the liability of the karta is unlimited.

67. ADVANTAGES
 Assured share in profits.
 Sharing of knowledge and
experience among members.
 Co-operative efforts.
 Unlimited liability of the karta.
 Continued existence.

68. LIMITATIONSLIMITATIONSLIMITATIONSLIMITATIONS
a.Limited resources.
b.Lack of motivation
among members.
c.Scope for misuse of
power by karta.
d.Scope for conflict and
instability.
a.Limited resources.
b.Lack of motivation
among members.
c.Scope for misuse of
power by karta.
d.Scope for conflict and
instability.

69. COOPERATIVE
SOCIETY

70. COOPERATIVE SOCIETY
Any ten persons can form a co-operative society.
It functions under the Cooperative Societies Act,
1912 and other State Co-operative Societies Acts.
A co-operative society is entirely different from
all other forms of organisation. The co-
operatives are formed primarily to render
services to its members. Generally it also
provides some service to the society. The main
objectives of co-operative society are:
(a)rendering service rather than earning profit,
(b)mutual help instead of competition, and
(c)self help in place of dependence

71. PPUBLICENBTRP EBCS
COOPERATIVE SOCIETY P…R.BL
CONSUMER LBEC
CREDITILBCCE…
MARKETTINGILE…
FARMINGP.RE… HOUSINGULP. BLR
PRODUCERS

72. FEATURES
oIt is a body corporate that enjoys certain privileges like a
joint stock company.
oIts primary objective is to render services to its members in
particular and society in general.
oIts management is most democratic in nature as compared to
other forms of business organisations.
oIts major finance is raised through government loans, grants,
subsidies and outside donations.
oMembers get return on capital at a fixed rate of dividend
from the profit as per the Societies Act.

73. ADVANTAGES
Formation is easy.
Democratic management.
Assistance from the government.
Elimination of middlemen’s profit.
Fairly stable life.

74. LIMITATIONS
Limited capital.
Lack of managerial talent.
Lack of motivation.
Lack of secrecy.
Dependence on the government.

75.
COMPANY

76. JOINT STOCK COMPANY
A Joint Stock Company form of organisation is a voluntary association
of persons to carry on business.
It is an association of persons who generally contribute money for
some common purpose. The money so contributed is the capital of the
company. The persons who contribute capital are its members. The
proportion of capital to which each member is entitled is called his
share, therefore members of a joint stock company are known as
shareholders and the capital of the company is known as share capital.
The total share capital is divided into a number of units known as
‘shares’. You may have heard of the names of joint stock companies like
Tata Iron & Steel Co. Limited, Hindustan Lever Limited, Reliance
Industries Limited, Steel Authority of India Limited, Ponds India
Limited etc.
The companies are governed by the Indian Companies Act, 1956. The
Act defines a company as an artificial person created by law, having
separate entity, with perpetual succession and a common seal.

77. &PS3RB.
COMPANY3N…U&I…USULEI
&PS3RB.
PUBLIC LIMITED
COMPANY3U4RLI…USULE
&PS3RB.
PRIVATE LIMITED
COMPANY

78. PEUNTRPCS… STI.UBPSR.N.BPS…NTU.PC
EXAMPLES OF PRIVATE LIMITED COMPANIESIS.SR
Reliance Industries LimitedBS SC!S"BC#
Tata Consultancy Services (TCS)$S$SNSR
Hero Honda Motors LimitedBUBUSCSR
TATA Steel Limited

79. B.IU/BRTPTU.0/E T/EECBT PUI…EBR
EXAMPLES OF PUBLIC LIMITED COMPANIESE""TP%T "T1EP 2T
Indian Oil Corporation (IOC) 0!T $TB% %T/( T10B/2
Bharat Heavy Electricals Limited (BHEL)E""TI%"
Indian AirlinesR %TI*!T+TE"T/( T1RIE/2T
Steel Authority of India Limited (SAIL)

80. FEATURES
 Artificial Person.
 Separate legal Entity.
 Common Seal.
 Perpetual Existence.
 Limited liability of Members.
 Transferability of Shares.
 Minimum membership– 2 for Private limited
company for public limited company.
Maximum membership – 50 for Private limited
company and unlimited for Public limited
company.

81. ADVANTAGES
Limited liability
Continuity of existence
Benefits of large scale operation
Professional management
Contribution to the society through
creation of employment, promoting
ancillary industries etc.
Research and Development

82. LIMITATION
Compliance with several laws and
fulfillment of a number of legal.
formalities during formation.
Management and control by a group.
Shares are subject to manipulation and
speculation.
Government interference.
Scope of misuse of resource power.

83. CHANGING ROLE OF PRIVATE SECTORCHANGING ROLE OF PRIVATE SECTOR
The private sector has done more than expected.The private sector has done more than expected.
India's software industry is world class. Indian manufacturing has finally become India's software industry is world class. Indian manufacturing has finally become
competitive.competitive.
Indian companies are making foreign acquisitions galore and becoming MNCs - Tata Indian companies are making foreign acquisitions galore and becoming MNCs - Tata
Steel, Bharat Forge, Tata Motors and Ranbaxy are a few examples.Steel, Bharat Forge, Tata Motors and Ranbaxy are a few examples.
Power was long a state monopoly, and state electricity boards were bankrupt when Power was long a state monopoly, and state electricity boards were bankrupt when
reforms began in 1991.reforms began in 1991.
The second green revolution is being energised by the private sector, not the public The second green revolution is being energised by the private sector, not the public
sector.sector.
Reliance has led the charge into rural areas in Punjab with a farm-to-fork operation - Reliance has led the charge into rural areas in Punjab with a farm-to-fork operation -
managing the chain from seeds and crops to processing and hypermarket sales.managing the chain from seeds and crops to processing and hypermarket sales.
ITC is rapidly expanding its e-choupals.ITC is rapidly expanding its e-choupals.

The Mahindras, Tatas and Shrirams are setting up rural supermarkets.The Mahindras, Tatas and Shrirams are setting up rural supermarkets.
The government developed the idea of deficiency payments for roads, with the contract The government developed the idea of deficiency payments for roads, with the contract
going to the bidder requiring the lowest toll subsidy.going to the bidder requiring the lowest toll subsidy.

84. THANK YOU