What are the advantages and disadvantages of a state-owned enterprise?

Answer 1

advantages

* easy formation there is no legal formalities for its formation and lso does not require a huge amount of capital. * quick decisions the sole trader being the supreme authority can take decisions independently without consulting others.

* better personal contact as it is small scale business, the owner can have personal contact with the customer as well as his employees. * flexibility if any change in the business is required he needs not consult with anyone. * less expensive management. the sole trader performs most of the work relating to his business. so expenses can be brought down to a minimum. * business secrets can be maintained.he can maintain secrets of his business because he need not disclose them to anyone. * no sharing of profit as it is one man business , he can enjoy the entire profit of the business.

disadvantages

* shortage of capital the capital resources of a sole trader are naturally limited. therefore expansion of the business is difficult. * unlimited liability the liability of the sole trader is unlimited or not limited to his capital contribution. that means his private properties are also liable for his business debts . * lack of continuity

the future of this kind of business is most uncertain. long illness, death, insolvency, insanity of the sole trader will surely disturb the business. * lack of management ability

the managerial ability of a sole trader is limited. he may not be master of all. * lack of economies of scale.because of limitation of finance and managerial ability, a sole trader operates on a small size. due to this , it does not enjoy the economies of large scale buying as well as increased sales

Answer 2

Everything you own no matter what it is it will always require maintenance. Certain things you own like land also bring about other disadvantages such as paying taxes. More disadvantages of ownership (this is my opinion now) is that if you own something you aren't using then it takes up space and becomes useless. If you were to rent something that you didn't use anymore you can simply stop renting it whereas owning you need to either sell it or you have a waste of space among your possessions.

Answer 3

One of the disadvantages of owning a private company is that one does not have access to the resources available to a publicly owned company. It is difficult to obtain funds to grow.

Answer 4

unlimited liability which is a financial risk as the owner may lose all their possessions

Answer 5

I think that Ha Jon Chang's writings on the subject might help you quite a bit.

Answer 6

The disadvantage of state ownership of land is that the peasants are usually squatters in their country.