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Class 11 Private, Public and Global Enterprises: cheat sheet
CBSE Business Studies. Private and public sector enterprises, the three forms of public enterprise, global enterprises, joint ventures and public private partnership.
Key ideas
- The private sector is owned by individuals or groups; the public sector is owned wholly or partly by the central or a state government.
- A departmental undertaking is run as part of a ministry, funded from the government budget and staffed by government employees, so it lacks flexibility.
- A statutory corporation is created by a special Act; it has a separate legal existence, financial independence and its own staff, with powers set by the Act.
- A government company is registered under the Companies Act, 2013, and governments hold at least 51% of its paid-up capital.
- Global enterprises are huge firms working in many countries, with large capital, advanced technology, strong marketing and control from the head office.
- In a joint venture two or more firms pool resources for a common purpose; it is contractual (no new firm) or equity based (a new, jointly owned company).
- A public private partnership shares the resources, risks and rewards of a public project, such as a road or water supply, between the government and a private partner.
Remember
| Government company test | central + state holding of paid-up capital ≥ 51% |
| Ownership in an equity joint venture | a partner’s contribution ÷ total contribution × 100 |
| Shares of a PPP project | private partner: cost × its share% ÷ 100; the government pays the rest |
| Departmental undertaking | formed by a ministry; no separate legal entity; budget funding; civil servants |
| Statutory corporation | formed by a special Act; separate legal entity; financially independent; own employees |
| Government company | formed under the Companies Act; separate legal entity; directors appointed by the government |
| Benefits of a joint venture | more resources and capacity, new markets, technology, innovation, lower cost, an established brand |
Watch out
- Counting only the central government’s share: for a government company, add the central and state holdings.
- Confusing a statutory corporation (made by a special Act) with a government company (registered under the Companies Act).
- Calling every joint venture a new company: a contractual joint venture creates no new firm.
Worked example
The central government holds 36% and state governments 21% of a company’s paid-up capital. (a) What is the total government holding? (b) Is it a government company?
Working: 36 + 21 = 57; a government company needs at least 51%
Answer: (a) 57%; (b) yes
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