private and public types of enterprises. enterprise and types of enterprises. enterprise is a business set up by the government or individual entrepreneur for the purpose of making profit. there are two major type of business enterprise.
there are private and public enterprises.
(a) Private type of enterprises:
Definition: Private enterprises are enterprises owned and managed by private individuals. This type of business organization is usually classified as a private sector enterprises and examples of such private enterpriser sole
proprietorship, partnership, private public limited liability companies and co-operative societies. The major aim or objective of the private enterprises is to maximize profits.
Characteristics or features of private enterprises
Private individuals provide the capital: Private individuals that owned the enterprises are the people to raise capital for the establishment of the enterprise
Ownership belongs to private individuals: Private individuals, e.g. sole proprietorship or partnership are the ones that own the business enterprise
Objective of business is to make profits:
The purpose of setting up the business enterprise is to make profits for the owners of the enterprise
Accountability is to the owners: The ions of the business enterprises are usually accounted for and submitted to the owners of the enterprise
Owners borne the risk of the less: In the event of business failure t ’liquidation, the owners will have to bear entire risks associated with such failures.
Owners manage the business themselves: The daily operations of a business enterprise is controlled and managed by the owners of the enterprise.
Public type of enterprises
Public enterprises are the types of organisations which are owned, controlled and managed by the government,
business organisations are owned by either the local, state or federal government and their major objective is to provide social services to the people. They are associated with such names as authority, corporation, boards and commissions.
Examples of public enterprises are public corporations and companies owned by government in Nigeria
such as the Power Holding Co-operation of Nigeria (P.H.C.N.), the Nigerian Ports Authority (N.P.A.), Nigerian Television Authority (N.TA.), Nigerian Railway Corporation (N.R.C.) and Nigerian Telecommunications Plc. (N.I.T.E.L.).
Characteristics or features of public enterprises
Government provides the capital:
Government provides the necessary capital required to set up public enterprises.
Ownership belongs to the government:
Public enterprises are usually set up by Acts of legislation and the enterprise belongs to the government.
Objective is to provide social services:
The major reason of setting up public enterprises is to provide social amenities and services to the people at reduced cost.
Management is accountable to the government: The management of public enterprises is directly accountable to the government that set up the enterprise.
Government and tax payer borne the risks: The risks associated with public enterprises are usually borne by the government and tax payers who provided the capital for setting up the enterprises.
Board of directors manage the business: The public enterprise is managed by board of directors appointed by the government.
Public enterprise is a legal entity: Public enterprise is a corporate body or a legal entity, meaning that it can sue and be sued in its own right.
Summary of the Types of Business Organisations 1
The summary of the types of business enterprise or organisation
No. of Owners
2 – 20
Ebun & Damian Enpterises
Private Limited Company
2 – 50
Sammy Enterprises Nig. Ltd.
Public Limited Company
7 to infinity
A.G Leventis Nigeria Plc.
Any number of persons
Eguje Cooperative, Thrift and Credit Society
Private enterprises are owned by individuals
Public enterprises are owned by government
Capital is provided by private individuals
Capital is provided by government (e.g local, state or federal).
Their major objective is to maximize profits
Their major objective is to provide social
Services to the people.
They are controlled by the owners or directors appointed by owners
They are controlled by the Board of Din appointed by the government.
They do not enjoy any monopoly
They enjoy some form of monopoly.
They are established by ordinary registration or by incorporation
They are established by acts of parliament
They require small amount of capital to set up
They require a huge amount of capital to set up
They are more efficient in the management of enterprises
They are less efficient in the management of enterprises.
Decision making can easily be taken without rigorous consultation
Decision making is always subjected to rigorous consultations.
Owners bear losses suffered by private enterprises
Tax payers bear losses suffered by public