Free Commerce Lesson Note SS 2

This Commerce Lesson Note was pulled from our book (Lesson Note on Commerce for SS2 MS-WORD); Compiled to serve as reference material to help teachers draw out their lesson plan easier, saving you valuable time to focus on the core job of teaching.

This Commerce Lesson Note Covers The Following Topics

1. PUBLIC ENTERPRISES/CORPORATION
2. LIMITED COMPANIES
3. SOURCES OF CAPITAL FOR LIMITED COMPANIES
4. CO-OPERATIVE SOCIETIES
5. REQUIREMENTS FOR COMMODITY TRADING
6. COMMODITY MARKET
7. CONSTRAINTS TO COMMODITY TRADING
8. BUYING AND SELLING (DOCUMENTS)
9. TERMS OF TRADE
10. CREDIT
11. FUNCTIONS OF CREDIT
12. TRADE ASSOCIATION
13. OTHER FORMS OF TRADE ASSOCIATIONS
14. INSURANCE
15. CONSUMER PROTECTION
16. TYPES OF INSURANCE
17. CONSUMER PROTECTION CONTROL
18. TRANSPORTATION
19. DOCUMENTS INVOLVED IN TRANSPORTATION
20. WAREHOUSING
21. HISTORY OF NIGERIAN CAPITAL MARKET
22. STOCK EXCHANGE
23. SECOND-TIER SECURITIES MARKET
24. CAPITAL
25. PROFIT
26. COMMUNICATION

Sample note

Week 1

Topic: Public Enterprises/Corporation

Contents:

1. Meaning of public enterprises/Corporation
2. formation and management of Public Enterprises
3. Sources of Capital, Reasons for government ownership of Public Enterprises
4. Advantages and disadvantages of a public corporation

Meaning of Public Enterprises

Public Enterprises means an entity that is created by the state to carry out public missions and services. A public enterprise is a large-scale business organization set up, owned, and financed by the government of a country with the aim of providing services to the members of the public. In order to carry out these public missions and services, a public corporation participates in activities or provides services that are also provided by private enterprises. A public corporation is also known as a public enterprise and a statutory corporation. The public corporation is managed and controlled by the board of directors appointed by the government.

Examples of public corporation are:

1. Federal Radio Corporation of Nigeria (F.R.C.N)
2. Nigeria National Petroleum Corporation (N.N.P.C)
3. Nigerian Telecommunication Limited (NITEL)
4. Nigeria Ports Authority (N.P.A)
5. Power Holding Company Of Nigeria (P.H.C.N)

Formation of public enterprises

1. Public Corporation:public corporations are organizations controlled by board of directors appointed by the government while the minister in charge is the overall controller.
2. Quasi Government departments:They perform some commercial functions. They are responsible to the government through the minister, e.g. Hospitals.
3. State government owned enterprise:These are enterprises established and controlled by the state government. State government owned enterprise is established by edicts. Example: Lagos State Transport Corporation.
4. Local Enterprises: They are managed by the local government; they are mostly facilitated in the rural area to ensure development in such areas.

Sources of capital to public corporations

The government can get finance from the following sources

1. Internally generated revenue: This is known as the profit made from the already existing businesses, they get finance from revenue generated internally.
2. Grant from foreign countries: Countries like the United State of America can help in granting loans or financial aids to set up public corporation.
3. Grant from international financial institution: Public corporation can also get their finance from some international financial institutions like International Monetary Fund (I.M.F)
4. Loans and Overdraft: Public corporation can also obtain loans and overdrafts from commercial or development banks.

Reasons for government ownership of Public Enterprises

Public Corporation is established for the following reasons

1. Employment opportunities: This is one of the major reasons for the establishment of a public corporation, the provision of business by the government creates an avenue for the unemployed to get a job to do.
2. For strategic and security reasons: The Government establishes a public corporation for the purpose of controlling certain key industries like airports, seaports, the oil industry for strategic reasons.
3. To provide infrastructural facilities: The governments also establish certain enterprises to provide infrastructural facilities like roads. railways etc
4. To prevent Monopolistic: The Government established public corporations also to prevent private sectors from exploiting the general public.
5. To promote Economic Development: Government invests in enterprises like banks, insurance, etc in order to have firm control over the economy and to regulate it.
6. To ensure even distribution of income: Government engages in some business enterprises in order to ensure fair and even distribution of income.
7. To prevent foreign dominance of the economy: The government ventures into business in order to prevent or reduce foreign control of the economy by foreign investors.
8. High capital requirement: Public corporation requires a lot of money to start which cannot be provided by private sectors or individuals.

Advantages of public corporation

The following points below are the reason/ advantages of a public corporation. Some of which are:

1. There will be availability of large and sufficient capital to work with.
2. They base their decisions on the full costs and benefits involved.
3. They can be used to influence economic activity. To boost the country’s output, public corporations can be directly encouraged to increase their output.
4. In cases where it is practical to have only one firm in the industry, such as rail infrastructure, a public corporation would not abuse its market power.
5. Ownership of a whole industry by the government makes planning and coordination easier. For instance, if the state runs the train system, it can ensure that train timetables are coordinated.
6. It is important to ensure that basic industries, so much as electricity and transport survive, charge low prices and produce good quality as other domestic industries depend on them.
7. It serves as a creation of higher standard of living for the people.
8. It also caters for the interest of the workers.
9. There will be continuity; there is perpetual existence.

• Avoidance of exploitation of consumers.

Disadvantages of Public Corporation

The following below are the disadvantages of Public corporations.

1. It requires a large capital
2. There is inefficiency in the operation
3. There is usually corruption and mismanagement of the public funds
4. It is not profitable
5. There is a lack of initiative
6. There is a lack of privacy
7. There is usually wastage
8. There is a danger of monopoly
9. Decision making is usually slow
10. Government regular interference.

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