Question

Distinguish Between.

Departmental Organisation and Government Company.

Answer 1

Points	Departmental Organisation	Government Company
1. Meaning	The organisation which is owned, managed, controlled, financed, and operated by the government is known as Departmental Organisation.	Government Company means a company where a minimum 51% of the paid-up capital is held by the Central or State Government jointly or individually.
2. Capital	The capital of the departmental organisation comes from the annual budget appropriations of the government.	The capital is contributed by the Central Government or State Government or even by the general public.
3. Management	It is managed by government officials of the concerned ministry.	Government Company is managed by the Board of Directors appointed by the government and shareholders.
4. control	It is controlled by the concerned ministry.	These companies are controlled by the government or shareholders.
5. Legal status	There is no separate legal status distinct from the government.	A government company has legal status separate from the Government
6. Borrowing power	Departmental undertaking cannot borrow from the public. It has to depend on the budget allocated by the government.	Government companies can borrow funds by the way of debt or issuing shares to the public.
7. Flexibility	It is a rigid in operation as its managed through offers of the government	Government companies are more flexible in the operations of the business. They can change the line of business as per the market trend.
8. Formation	It is formed through Executive decisions taken by the concerned ministry.	Government companies are formed and registered under the provisions of Companies Act, 2013.