1. State Ownership:

A public enterprise is wholly owned by the Central Government or State Government(s) or local authority or jointly owned by two or more of them, in case the enterprise is owned both by the Government and private sector, the State must have at least 51 percent share in ownership.

2. State Control:

The ultimate control of a public enterprise lies with the Government which appoints its Board of Directors and the Chief Executive.


3. Government financing:

The whole or a major portion of the capital of a public enterprise is provided by the Government.

4. Service Motive:

The primary aim of a public enterprise is to render service to the society at large. It may have even to incur losses for this purpose. However, public enterprises are expected to generate surplus in course of time.


5. Public Accountability:

Public enterprises are financed out of public money. Therefore, they are accountable for their results to the elected representatives of the public, i.e., the Parliament and the State Legislature. That is why; the working of public enterprises is scrutinized by the Committees of the Parliament or the State Legislature.

6. Autonomous Bodies:

Public enterprises are autonomous or semi- autonomous bodies. In some cases they work under the control of Government departments. In other cases these enterprises function as companies and statutory corporations.