Differences between departmental undertaking,public corporation and government company for 11th commerce
Answers
Difference between Departmental Undertaking, Public Corporation and Govt Company on the basis of :
Formation
Departmental Undertaking is formed by the ministry as a department of the government.
Public Corporation is formed by passing a special Act in the parliament.
Govt Company is formed by getting registered under the Companies Act,1956.
Legal Status
Departmental Undertaking is not a separate legal entity.
Public Corporation is a separate legal entity.
Govt Company is also a separate legal entity.
Finance
Departmental Undertaking is totally financed by the govt in budgetary allocations.
Public Corporations gets funds from govt and can also borrow independently.
Govt Company has separate financing and govt provides funds by major shareholding.
Ownership
Departmental Undertaking is wholly owned by the govt.
Public Corporation is wholly owned by govt.
Govt Company is partly owned by govt.( 51% shares).
Management
Departmental Undertaking is managed by govt officials.
Public Corporation is managed by Board of directors nominated by the govt.
Govt Company is managed by BoD nominated by govt but private individuals can also be directors.
Suitability
Departmental Undertaking is suitable for Defence, Post, Railways, Telecom.
Public Corporations is suitable for industrial and commercial enterprises of national importance.
Govt Company is suitable for industrial and commercial enterprises requiring foreign private and domestic capital.
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Explanation:
formation
departmental undertaking is formed by