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ii. Lack of secrecy: Companies are managed by so many persons that their
business secrets can be preserved only with difficulty. Their business plans and
true financial position can easily leak out
iii. Chances of fraud by the directors: As all the responsibilities are handed over to
the hands of directors, sometimes, they may manipulate and misuse a very big
amount and goods of the company.
iv. Lack of prompt decision: In company, decision-making process is very lengthy
and time consuming because all-important decisions are made by the board
meeting or general meeting. Calling for a meeting and conducting it is a lengthy
process.
v. Misuse of power: The power of the company is centralized in the hands of Board
of Directors. So the clever and dishonest directors can take undue advantages
from the company.
vi. Neglect of a minority: There are two types of shareholders in the company-
promoter shareholders and general shareholders. Promoter shareholders are
few in number but hold large number of shares, on the other hand, general
shareholders are large in number but they hold less number of shares. In
company, there is principle of ‘one share one vote’ and due to this reason
majority of decisions are dominated by promoters.

Public Enterprises

Public enterprise is a business organization wholly or partly owned by the state and
controlled through a public authority. It is an enterprise under government control.
More than half of the total shares of a public enterprise is owned by the government
and effectively managed by the government. Such organizations are run mainly by
government to provide qualitative goods and services to public at a reasonable price.
They include all the industrial and commercial activities of the government. The
principal objective of public enterprises is to establish basic industries in the country and
provide utility services like water, electricity, transportation, communication etc to the
people. These public enterprises are established under Corporation Act, Development
Board Act, Company Act or special act of the parliament. Nepal Bank Limited, Nepal
Oil Corporation, Nepal Electricity Authority, Nepal Salt Trading Corporation, National
Trading Corporation, Airlines Corporation, Nepal Television, Dairy Development
Corporation are some of the examples of public enterprises in Nepal.

According to A.H. Hanson, “Public enterprise means state ownership and
operation of industrial, agricultural, financial and commercial undertaking.”

According to A.N. Agrawal – "Public enterprises are established, controlled
and operated by the government to produce and supply goods and services
to the society."

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