Question

What are the Features of Government company? (Any 5)

Answer 1

1. Registration Under the Companies Act:
A Government company is formed through registration under the Companies Act, 1956; and is subject to the provisions of this Act, like any other company. However, the Central Government may direct that any of the provisions of the Companies Act shall not apply to a Government company or shall apply with certain modifications.

2. Executive Decision of Government:
A Government company is created by an executive decision of the Government, without seeking the approval of the Parliament or the State Legislature.

3. Separate Legal Entity:
A Government company is a legal entity separate from the Government. It can acquire property; can make contracts and can file suits, in its own name.

4. Whole or Majority Capital Provided by Government:
The whole or majority (at least 51 %) of the capital of a Government company is provided by the Government, but the revenues of the company are not deposited into the treasury.

5. Majority of Government Directors:
Being in possession of a majority of share capital, the Government has the authority to appoint a majority of directors, on the Board of Directors of a government company.