Government company is a type of business company which is established under the company act in which majority of share capital is provided by government. There are some distinct characteristics or features of government such as created by government, flexibility, accountability etc.
Following are the features of government company:
Government company is created by government under the Company Act. It has separate legal status and it can buy, sell and own property in its own name. Government company can sue and be sued in courts. Main motive of government company is to provide service and also earn profit.
The government provides at least 51% of share capital. It can issue shares to public and can borrow funds from government and public. But the government liability is limited to the face value of shares subscribed.
Its management is done by a board of directors. The majority of directors are appointed by the government. The government also appoints the chief executive officer.
4. Flexibility
Government company enjoys autonomy and flexibility in internal operations. It has its own rules and regulations. it must follow the provisions of the Company Act.
Government company hires its own employees. Their salaries and facilities are as per company rules.
Public accountability is another notable feature of government company. It is accountable to public through parliament. The auditor general or his representative audits its books of accounts and reports its performance.
1. Formation
Government company is created by government under the Company Act. It has separate legal status and it can buy, sell and own property in its own name. Government company can sue and be sued in courts. Main motive of government company is to provide service and also earn profit.
2. Capital
The government provides at least 51% of share capital. It can issue shares to public and can borrow funds from government and public. But the government liability is limited to the face value of shares subscribed.
3. Management and control
Its management is done by a board of directors. The majority of directors are appointed by the government. The government also appoints the chief executive officer.
4. Flexibility
Government company enjoys autonomy and flexibility in internal operations. It has its own rules and regulations. it must follow the provisions of the Company Act.
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5. Staffing
Government company hires its own employees. Their salaries and facilities are as per company rules.
6. Public accountability
Public accountability is another notable feature of government company. It is accountable to public through parliament. The auditor general or his representative audits its books of accounts and reports its performance.
