Question

Attempt the following.

Features of Government Company.

Answer 1

The Government Company may be registered as public or private limited companies. These companies are established for purely business purposes and to compete with the private sector.

The following are the features of Government Company:

1. Free from Procedural Controls: The Government companies have a right to formulate their independent policies and even make necessary changes in them. It enjoys freedom from budgetary, accounting, and audit controls which are applicable to Government undertakings.
2. Majority of Government Directors: All or majority of directors of such companies are appointed by the Government from different fields. They may be experts from the banking sector, insurance sector, who manage the day to day business affairs.
3. Public Accountability: The annual accounts of the company are tabled before Parliament or State Legislature for review and discussion. Thus, the Government Company is accountable and answerable to the Parliament or State Legislature through the concerned Minister.
4. Registration under the Companies Act: The Government Company is registered under the Companies Act, 2013, and its formation, working, management and winding up a business is governed by provisions of the Act. The government has the power to modify or change certain provisions laid down in the Act
5. Own Staff: The employees are appointed as per the rules and regulations set by the company. Its employees are not governed by the respective Government.
6. Promotes Social Welfare: Government Companies aim to optimise national and natural resources such as land, water, electricity, etc. It produces arms, ammunition, and other defence equipment. It also brings about balanced regional development and leads to equality of income.
7. Objective: It operates on commercial principles and as such its aim is to make a profit.