1. Define what public enterprise means.

Public enterprise is established by government sector can establish commercial under taking
were there are no capable investors to create, invest capital and provide goods and
service .

public enterprise, a business organization wholly or partly owned by the state and controlled
through a public authority.

However, subsequent proclamations have come up with diversified usages of the term enterprise.
For instance, the Privatization of Public Enterprises Proclamation No. 146/1998 (Privatization of
Public Enterprises Proclamation) defined the term enterprise as “a public enterprise governed by
the Public Enterprises Proclamation No. 25/1992 or an establishment designated by the
Government as a public enterprise for the purpose of the application of this Proclamation”.

2. Describe their historical development.

 A Short Historical Review of public enterprise

The origin of public enterprise could be traced to early twentieth century when government
intervened in economic management through departmental organizations, which did not
involve creating autonomous 12 public bodies. In the alternative, it granted license to a private
enterprise for the management of natural or national monopolies and where public bodies
were involved in managing economic ventures, such bodies did not enjoy financial autonomy.

Public enterprises made a very strong appearance after World War I for a variety of reasons,
including managing the consequences of war, especially the economic crisis of the 1930s.
However, public enterprises sector develop rapidly because of the spread of Keynesian
interventionist. Between the two World Wars, political and ideological consideration prompted
the establishment of parastatals in the former colonial metropolis.

The emergence of public enterprise sector in Ethiopia is contemporaneous with the

modernization attempts of the state itself in the early twentieth century.For purposes of making
clear distinctions, we classify the public enterprise history in Ethiopia in to three periods: the
Imperial regime of Haile Sellassie, the socialist Regime, and post 1991 onwards.

 Haileselasie’s regime

It is known for embracing the free market economic system. Public enterprises were formed by
the state as a sole owner and as joint ventures with private persons, mostly foreigners, for
domestic private capital were almost non-existent.

 The Socialist Regime

With the adoption of the socialist precepts, the Derg regime was characterized by state
ownership and control of the major means of production (rural and urban lands, extra houses and
basic production and distribution facilities).

 The Post 1991 Period

The Ethiopian state during this period has assumed two forms: one is the Transitional
Government of Ethiopia (TGE) constituted by the 1991 Transition Charter, and the other is the
Federal Democratic Republic of Ethiopia proclaimed by the 1995 Constitution. In both cases, the
role of the state in the economy is similar.

3.3, Explain their types, governance, and grounds of dissolution in light of Proclamation
No.25/1992
  Classification of public Enterprises.

Public enterprises are classified into three; namely public/statutory corporations, state-owned
companies, and mixed economy enterprises.

1. Public/statutory corporation: These are enterprises, which arise when the government
assumes responsibility for the management of an economic or social pursuit through a special
entity that has its own legal personality and still keeps some of the special prerogative or
privilege associated with a governmental organization. The blend of these features is aimed at
enabling the organization to function effectively as an autonomous body while it remains an
instrument of government policy

2. State Owned Corporation: these are companies created by government under the
provisions of ordinary company law, though they belong entirely to the government. They are
registered in the registry of companies, with the government as the Sole Proprietor. Government,
therefore, appoint the board of Directors as is customary in private companies.

3. Mixed-Economy Enterprises: these are enterprises where the government is the majority
shareholder in a partnership with private entrepreneurs. In such companies, government usually
dominates the board since it is the major shareholder.

 The governance of public enterprises

public enterprise, a business organization wholly or partly owned by the state and
controlled through a public authority.

,As per article 10 of the Public Enterprise Proclamation each enterprise shall, among others,
have a Supervising Authority, a Management Board and a General Manager (and Deputy
General Manager as may be necessary).
  Grounds of Company Dissolution under Ethiopian law

Dissolution of companies may result from non compliance with the requirements of the law,
from provisions of the bylaws of the company, from the common agreement of members to
dissolve or from a judicial decision dissolving the companies for just cause.

 Non Compliance with the Requirements of the Law

One of the grounds for dissolution as per Ethiopian law is noncompliance with the requirements
of the law. This type of dissolution occurs when companies don’t comply with the rules set out in
the Commercial Code of Ethiopia. less than two the company shall dissolve for noncompliance
with the requirements of the law.

 Dissolution as per the By laws of the Company

Another ground for company dissolution in Ethiopia is as per the by laws of the
Company.Causes of dissolution may be laid down in provisions of the company. These causes
may relate to its duration or its objects. “If the statute of a company /partnership provides that it
shall endure for a fixed term, it is dissolved automatically at the end of that term.

 Dissolution Resulting from the Agreements of Members

Another ground of company dissolution results from the agreements of members. Accordingly a
company or partnership may be dissolved prematurely if all its members agree, or if the
appropriate majority resolves to alter its provisions so as to bring about its immediate
dissolution.

 Dissolution By the Order Of the Court;

Dissolution by court is set under article 218 of the Commercial Code of Ethiopia. This article
stipulates that a company may only be dissolved by court if there exists a good cause and an
application is made to that effect.