Business Association/ enterprises

Saroj Ghimire
For KUSOM BBA
 Business
• Business is fundamental to economic
prosperity of the country.
• Business are carried for the purpose of
earning profit.
• Business involves services, production,
manufacture, supply of goods, export and
import etc.
• Business is always governed by law
 Law and business
• Law determines or governs business in following ways.
• Law identifies area of business
• Law prohibits certain business.
• Law provides how the business to be carried.
• Law provides the mode by which enterprises can be
established.
• Law provides the modes by which business can be
brought to an end.
• Law provides the way by which proper management
can be carried.
 Carrying of business
• In Nepal, law has given two mode of carrying
business in broad sense:

• Private Sector
• Public sector
 Private Sector
• Carrying business to make profit by operating
through any of the following types.
• A. sole proprietorship
• B. Partnership
• C. Company
• D. Cooperatives
 Public Sector
• Public Sector means those sectors of business
enterprises in which the Governemnt of Nepal has
invested money to carry business and has taken control
either fully or partially.
• They are mostly run by providing goods or services to
the public in general or nationwide.
• They are financed by the Governemnt of Nepal and not
from private resources except to the companies in
which government has subscribed shares.
• They are governed and managed by the government
pursuant to the concerned laws.
 Formation of public enterprises.
• Formation under General Law:
• Corporation Act 2023:
• Nepal Food Corporation
• Nepal Salt Trading Corporation.
• Transport Corporation.
• DDC
• Nepal Timber Corporation
 Formation under special Act
• Nepal Airlines Coporation/ Nepal Airlines
Corporation Act.
• Gorkhapatra Corporation/ Gorkha Patra
Corporation Act
• CAAN
• NEA
 For under Development Board Act
1956
• Radio Nepal
• Sighdurbar Baidya Khana
• Pasupati Bikas
 Formation under Companies Act
• Nepal Telecom Corporation Pvt Ltd.
Government and Public Enterprises
• Public enterprises is not a Governemnt Department.
• They are governed under that Act by which they are
formed.
• They have their own power and duties under their Act
or charter.
• However, government may control on the appointment
of its officers.
• They also requires to be accountable to the
Governemnt, like auditing.
• Their budget can be made by the Governemnt
 Changing dimension
• Change of the role of Governemnt.
• Government was involved in business.
• This trend was found mostly between 1960-
70s
• State was considered to be welfaristic state.
• State was to supply goods, foods and services
to its people.
• Less chances to private sector
 Now
• Private sectors are recognised.
• Result showed that private sectors are more
good in business.
• Government owned enterprises could not do
good.
• Privatisation Act introduced. 1992
• Private sectors participation expected and
opportunity given.
 Legal personality
• Meaning of legal personality:
• Personality recognised by law.
• Having rights and being bound by duties is
said to have personality.
• Attributed to the person.
• Law recognises personality of two persons:
• 1. Natural person.
• 2. Legal person
 Natural person
• Human being.
• Personality gained by birth.
• Sometime natural person may not have
personality in some areas, in case of :
• Minority
• Unsound mind
• Criminals
• aliens
 Legal person
• Personality given by law or recognised by law
• They are not human being.
• There are artifical entity existed by law.
• There personality depends on law/ law may
take personality at any time.
• Controlled and regulated by law.
• Natural person are entrusted to their function.
 Seperate Legal Personality
• Legal personality not attached to law.
• Deperate tperson than natural person
• Creation of natural person, recognised by law
 Feature of Separate legal personality
• Creation of law
• Have own name and identity
• Have one or more natural person to run
• Perpetual succession
• Own seal
• Can by and sell property in own name
• Sue and be sued
• Open bank account on own name
• Lease or enter into contract
• Own liability