ACCA Applied Knowledge · Business and Technology · The purpose and types of business organisation
A government decides to sell its entire shareholding in a state-owned railway company to private investors. Which term describes this?
This is privatisation, the transfer of ownership of an organisation from the public sector to private investors. Nationalisation is the opposite, where the state takes over private businesses, and mutualisation would involve ownership by members or customers, which is not what happens here.
- ANationalisation
- BPrivatisationCorrect
- CMutualisation
Explanation
Privatisation is the transfer of ownership of an organisation from the public sector to the private sector, here by selling shares to investors. Nationalisation is the reverse, where the state takes private assets into public ownership. Mutualisation would mean transferring ownership to its members or customers, which is not described.
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