explain the merits and limitations of statutory corporation class 11
Answers
Answer:
The disadvantages of statutory corporations are as follows;-
(1) Difficult Formation: It is very difficult to form statutory corporations because it requires lengthy documentation, complicated formalities & passing of statue.
(2) Rigidity: The policies once approved, the statue once passed cannot be changed easily. It can be done by the parliament only & this is very time consuming.
(3) Political Interference: Statutory corporations are subject to political interference & this affects the efficiency of the corporation.
(4)Suitability: Statutory corporations is suitable only for giant size business but is not suitable for small size business.
(5) Inefficiency: Statutory corporations always lacks efficiency. This is because of rigid policies of management or the government.
(6) Monopoly: Statutory corporations enjoy total monopoly & private sector cannot compete with it. This encourages monopoly & defeats the motive of statutory corporations.
(7) Wastage of Resources: There is often wastage of physical, capital and manpower resources in several cases.
Explanation:
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