Theory question 102
Government and BusinessCommerce 2 (answer five questions)
Explain any five ways in which nationalised industries differ from public limited companies.
Show the model answer
Any five, explained: ownership – government vs shareholders; formation – by Act/decree vs registration (incorporation) under the Companies Act; capital – from government grants/loans vs sale of shares and debentures; control/management – board appointed by the minister vs board of directors elected by shareholders; objective – public service/welfare vs profit; profit – goes to government/reinvested vs paid as dividends to shareholders; accountability – to the minister and legislature vs to shareholders at the AGM; losses – borne by government (taxpayers) vs shareholders; often a monopoly vs operates in competition; shares not traded vs quoted on the Stock Exchange.
Set out the differences point by point (a table is acceptable).