Private Equity Interview Question:

What is a privately owned enterprise?

Submitted by: Murtaza

A privately owned enterprise refers to a commercial enterprise that is owned by private investors, shareholders or owners (usually collectively, but they can be owned by a single individual) and is in contrast to state institutions, such as publicly owned enterprises and government agencies. Private enterprises comprise the private sector of an economy.

An economic system that contains:
☛ a large private sector where privately run businesses are the backbone of the economy
☛ business surplus is controlled by the owners, is referred to as capitalism.
This contrasts with socialism, where industry is owned by the state or by all of the community in common. The act of taking assets into the private sector is referred to as privatization. The goal of private enterprise differs from other institutions, the major difference being private businesses exist solely to generate profit for the owners or shareholders.
Submitted by: Murtaza