Legal Structure (Public Corp. Joint venture and holding company)

Question 1

What is a holding company?

Answer 1

A business organisation that owns and controls a number of separate businesses, but does not unite them into one unified company

Question 2

Common features of a holding company

Answer 2

Diversified interest and independent for major decisions but centralised board of directors from the holding company decides extremely crucial subjects such as new investments

Question 3

What is a joint venture?

Answer 3

two or more businesses agree to work
closely together on a particular project and create a
separate business division to do so

Question 4

What is a public corporation?

Answer 4

a business enterprise owned and
controlled by the state – also known as nationalised
industry.

Question 5

Advantages of a public corporation?

Answer 5

Managed with social objectives
Loss making services still goes on if it benefits society
Finance mainly raised from the government

Question 6

Disadvantages of Public Corporations?

Answer 6

Inefficiency due to lack of strict profit targets

Subsidies can also encourage ineffcienies