Theory question 106
Business OrganisationsSection B (answer four questions only from this section)
(a) Distinguish between a public company and a public corporation.
(b) What are the problems of public corporations in your country?
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(a) A public (limited) company is privately owned by shareholders, formed under the Companies Act, sells shares to the public on the stock exchange, has a minimum of seven members and aims at profit. A public corporation is owned and financed by government, set up by an Act or decree, has no private shareholders, is run by a board appointed by government and aims mainly at providing essential services.
(b) Inadequate funding by government; political interference; poor management and inefficiency; corruption and embezzlement; over-staffing; frequent changes of board members; bureaucracy and slow decisions; lack of profit motive; poor maintenance of equipment; continued dependence on subsidies.
Compare ownership, formation, finance, control and aims in (a).