Public enterprises is a business organization who is wholly or partly owned by the state and controlled through public authority. The aims of public enterprises are to provide public utilities like drinking water, communication, fuel, electricity, transport facilities etc. at a reasonable price. The public enterprises are established, owned, managed and controlled by government for the purpose of providing goods and services to the people at reasonable prices. 

According to A.H. Hansen, a public enterprise denotes “state ownership and operation of industrial, agricultural, financial and commercial undertakings”

According to N.N. Malaya, “Public enterprises are autonomous or semi-autonomous corporations and companies established, owned and controlled by the state and engaged in industrial and commercial undertakings”

Public enterprises invest a large amount of money in establishing a large scale of industries. Public enterprises are main instrument or tool to support a government in developmental planning. They work according to government planning. Public enterprise invests a large sum of money in establishing the big size of the industry we establish a larger number of people will get employment opportunities. Public enterprises are mainly concerned to provide service even though they are profit organization. 

Nepal Telecom Co.Ltd. Nepal Airlines corporative, Nepal oil corporative, Nepal Electricity Authority, Dairy Development Corporation, Salt Trading corporation, National Trading corporation are some examples of public enterprises operating in Nepal.

The main characteristics of public enterprises:

• Government ownership
• Government management and control
• Service motive
• Financial autonomy
• Autonomous body
• Separate legal entity
• Public accountability
• Perpetual succession

The public enterprises have the following importances:

• Establishment of key and heavy industries
• Avoid uncertainty
• Planned Development
• Balance Development
• Creation of employment
• Development of infrastructure
• Public utility concern
• Source of government
• Accelerate economic growth

ts poThere are various types of public enterprises On the basis of organizational affiliation and management, public enterprises can be classified into following types:

Departmental Undertaking
Those business enterprises which are totally invested and controlled by the specific ministry of government are called departmental undertaking. Under the departmental undertaking, all business activities are carried on under the overall control of the concerned ministry.  The features of the departmental undertaking:

• Formation
   Departmental undertaking is created by the government. It is attached to a government ministry. The earnings of the government are deposited to the government 
  
  
• No separate legal entity
  The undertakings are the part of government establishment. Hence, it has no separate legal entity.  The departmental undertaking cannot purchase and sell assets of enterprises by its own name.
  
  
• Management and control
  It is managed by the officials  of the concerned government department. It strictly follows government rules and regulations. It is controlled by the government according to existing legal provisions. It required employees as like public servant.
  
  
• Rules and regulations
  The rules and regulations provided by the government  should  be followed by the departmental undertakings. It has to follow the same system for accounting, budgeting, audit procedures and other rules and regulations of the undertakings.
  
  
• Accountability
  The departmental undertaking is accountable towards parliament and government of a country. The undertaking is accountable to the people like all other departments of the government through the people like all other of the government through the parliament regarding its budgeting, accounting, and audit matters.

Public corporation
Public corporation is the most widely used form of organizations for operating  a public enterprise. Its powers, duties,objectives, privileges, scope of operations and management are all defined by the act. The main purpose of the public corporation is the maximization of social welfare.This company invests a large amount of capital to provide product or service for the general public.
The features of public corporation are as follows:

• Formation
  Public corporation is created by a special act of parliament. The act defines the role, duties, power, objectives, function as well as the relationship of the corporation with other departments of the government
  
  
• Separate legal entity
  A public corporation can adopt its financial management system. It can sell and purchase the assets in its own name. It can sue and can also be sued.
  
  
• Government ownership and control
  It is totally controlled by the government.  However, some portion of its share capital is also held by the general public. But these private shareholders are in a minority.
  
  
• Own employees
  The employees of the public corporation are not the civil servants they have their own employees. It is free to frame  rules and regulations for recruitment, promotion, training of employees and  to develop other terms and condition of employment.
  
  
• Service motive
  The motive of the public corporation is to pursue public welfare activities and   to render service to the society at large. It may have even to incur losses for this purpose. 

   

Government Companies
Public enterprises established under the company law of the country are called government companies. This type of company is a popular enterprise  and enjoys all the privileges of a joint stock company. The liability of the government is limited. The features of government companies are:

• Incorporated under the Company Act
  A government company is incorporated under the common company law of the country. These companies are registered as private limited companies through their management and their control vest with the government. This is a type of organization where both the government and private individuals are shareholders. In 
  
  
• Government ownership
  The government provides at least 51% of share capital.  But the government liability is limited to the face value of shares subscribed. In other words, the government holds majority shares of the company.
  
  Separate legal entity
  A government company has its separate legal entity which is different from the government himself. It can sell and purchase assets in its own name.

   

• Board of Directors
  Board of directors manages the government company. All activities of the company are operated, managed, and controlled by the board of directors.

• Financial autonomy
  A government company can manage its own independent financial policy on its own. It prepares a budget, formulates financial policies and develops accounting system for its successful operations.

Public enterprises is a business organization who is wholly or partly owned by the state and controlled through public authority. The aims of public enterprises are to provide public utilities like drinking water, communication, fuel, electricity, transport facilities etc. at a reasonable price. The public enterprises are established, owned, managed and controlled by government for the purpose of providing goods and services to the people at reasonable prices. 

According to A.H. Hansen, a public enterprise denotes “state ownership and operation of industrial, agricultural, financial and commercial undertakings”

According to N.N. Malaya, “Public enterprises are autonomous or semi-autonomous corporations and companies established, owned and controlled by the state and engaged in industrial and commercial undertakings”

Public enterprises invest a large amount of money in establishing a large scale of industries. Public enterprises are main instrument or tool to support a government in developmental planning. They work according to government planning. Public enterprise invests a large sum of money in establishing the big size of the industry we establish a larger number of people will get employment opportunities. Public enterprises are mainly concerned to provide service even though they are profit organization. 

The main characteristics of public enterprises are:

• Government ownership
• Government management and control
• Service motive
• Financial autonomy
• Autonomous body
• Separate legal entity
• Public accountability
• Perpetual succession

The main characteristics of public enterprises:

• Government ownership
• Government management and control
• Service motive
• Financial autonomy
• Autonomous body
• Separate legal entity
• Public accountability
• Perpetual succession

Government ownership:

It is owned by the government.It is either wholly or partially owned by the state investing, at least, fifty-one percent of its share capital.

Government management and control:

A public enterprise is managed and controlled by the government.The government appoints the board of directors and the chief executive for the management of day-day affairs of the enterprises.

Service motive:

A public enterprise is established for providing quality goods and services to the people rather than earning profit. Although, it may make some profits, its primary objective is to always to provide service to the society.

Financial autonomy:

It has financial autonomy in the operation of its business. It can generate revenues by producing and selling goods and services and make expenditures thereof on their own without government interference.

Autonomous body:

Public enterprise is  an autonomous body. The board of directors is all in all in the enterprises and is independent of government regulations. It has its own rules bylaws to govern its operations.

Separate legal entity;

It is established under the law with a separate legal entity, except the department organizations. It has a corporate status with a corporate status with a common seal. It can be sue and can be sued.

Public accountability:
Public enterprises are financed from public money, accountable to the general public. The board of directors and executives of the enterprises are accountable for their performance to the parliament.

Perpetual Succession:

It has a permanent life .Being a separate legal entity, its life is not affected by the changes in the government its own management.