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SS1: ECONOMICS - 2ND TERM

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  1. Firms & Industry | Week 1
    4 Topics
  2. Firms & Industry (Business Organisation) | Week 2
    5 Topics
    |
    1 Quiz
  3. Population Theory I | Week 3
    3 Topics
  4. Population Theory II | Week 4
    3 Topics
  5. Population | Week 5
    3 Topics
  6. Population Distribution | Week 6
    4 Topics
  7. Population Census | Week 7
    3 Topics
    |
    1 Quiz
  8. Labour Market | Week 8
    3 Topics
    |
    1 Quiz
  9. The Nature of the Nigerian Economy | Week 9
    4 Topics
    |
    1 Quiz
  10. Agriculture | Week 10
    4 Topics
    |
    1 Quiz



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A public corporation is a business organisation that is owned and run by the government. This is a unit that is established to provide services to the public and not for profit purposes. The business unit that is controlled or owned by the local government is called a municipal enterprise.

It is established by the act of parliaments or degree. The public corporation is supervised by the federal government and controlled by boards of directors appointed by the government

Examples of public corporations include Nigeria Port Authority (NPA), Nigerian Television Authority (NTA), Nigerian National Petroleum Corporation (NNPC), Waterboard (Lagos State Water Corporation), National Electric Power Authority (NEPA), Nigerian Railway Corporation (NRC), etc.

Characteristics of Public Corporation:

1. The government provides capital for the running of the enterprise.
2. They are established either by decree or act of parliament.
3. They are not set up to make profit but to provide essential goods and services to the people.
4. They have a specialised area of concentration.
5. The government appoints the board of directors.
6. They rely on the government for survival.

Objectives of Public Corporation:

1. To provide essential services to the public.
2. To provide employment opportunities.
3. To effect the use of large capital for the production of social amenities.
4. Provision of certain key industries for development and growth.
5. To prevent waste and subsidise certain goods.
6. Discourage and prevent foreign monopoly. 
7. To raise the standard of living of the people.

Problems of Public Corporation:

1. Negligent attitude of workers causes poor performance in the system.
2. Insufficient funds for the corporation. 
3. The performance can be affected as a result of regular interference from the government
4. Favouritism and partiality among the senior officers of the corporation.
5. Inadequate skilled personnel.
6. Misappropriation and corruption of public officers affect the corporation negatively.
7. There is a delay in decision making. 

Advantages of Public Corporation:

The following are advantages of Public Corporation;

1. There is continuity in operation.
2. It increases employment opportunities.
3. Increase in government revenue.
4. It increases the standard of living of people and reduces the cost of living
5. There is access to economies of scale.
6. They provide essential services.
7. They have easy access to loans.

Disadvantages of Public Corporation:

The following are disadvantages of Public Corporation;

1. Misappropriation and corruption of funds among workers.
2. They don’t have sufficient capital they entirely rely on government subventions.
3. Poor attitude to work among workers.
4. Delay in decision making.
5. They don’t make the effort to get their own source of income through maximizing profit.

Evaluation Questions:

1. Highlight five characteristics of Public Limited Liability 

View Answer

2. Differentiate between a public corporation and a private limited liability company.

View Answer

3. For the Formation of a partnership business partners must have a written document that will guide the business. State the partnership deeds.

View Answer

Responses

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Question 1

Highlight five characteristics of Public Limited Liability.

Answer:

  1. The minimum number that can form a public company is seven while the maximum remains infinite.
  2. A public limited company is a legal entity. It can sue and be sued in its own name.
  3. It enjoys a continuous existence. The death of some shareholders cannot affect the business.
  4. It has limited liability. The liability of shareholders is limited to the amount contributed to the company.
  5. The accounts of the company must be audited and published annually.
  6. The shares of a public company can easily be transferred.
  7. Capital is raised through the issue of shares publicly.
  8. It must follow some special formalities before registration.

Question 2

Differentiate between a public corporation and a private limited liability company.

Answer:

Feature Public Corporation Private limited company
i. Ownership           The government. Shareholders.
ii. Formation Acts of parliament. Incorporation.
iii. Control Government appoints boards of directors. Board of directors is elected by shareholders.
iv. Capital Government through grants. Provided through shares and debentures.
v. Aim Provision of essential services. To make profit.

Question 3

For the Formation of a partnership, business partners must have a written document that will guide the business. State the partnership deeds.

Answer:

  1. How capital is to be contributed by each partner.
  2. How profits and losses are to be shared.
  3. How a new partner may be admitted.
  4. The liability of each partner.
  5. The name of the business.
  6. Whether partners are entitled to remuneration for acting in the partnership business.
  7. Whether interest is to be allowed on capital and at what rate.
  8. Its obligation and how matters should be decided.
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