Types Of Public Enterprises

Public enterprises can be of three types as follows:

1. Departmental Undertaking

It is created by government. It is part of the government system and is attached as department to a government ministry. Department undertaking has no separate legal status. Its activities are business-oriented with service motive. It follows government rules and regulations. It has no flexibility in operations. It is financed, managed and controlled by government. It has public accountability. The ministry is answerable about its affairs. An example of such undertaking is Postal Services Department.

2. Public Corporation

Public corporation is created by a special act of parliament. It has separate legal status. Its scope, objectives, power, duties and operating procedures are specified by the Act.Public corporation is established to achieve socioeconomic objectives of the country. It is guided by service motive. It enjoys flexibility and autonomy in internal operations. It is financed by government and managed by government appointed board of directors. It has public accountability through parliament.

3. Government Company

Government company is a joint stick company created under the Company Act. It has a separate legal status It can be public or private company. The government ownership in shares ranges from 51% to 100%. It can borrow funds and its activities are business oriented with service motive. It also makes profit. The liability of shareholders is limited. It enjoys full flexibility internal operations. It follows its own rules and regulations. It is managed by a board of directors. Government nominees have majority in the board.

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