Government company is registered under special legislation. (State with reason whether the given statement is true or false)
Answers
Government Companies
7.1 In general, there is little justification for Government companies being provided relaxations in compliance with company law. It is even less if such companies are listed. Not only should such Government companies be able to compete in the market economy with other companies on equal terms, it would not be fair to the investors or creditors if such entities are allowed to present their performance on the basis of dissimilar parameters.
7.2 Government companies may be subject to imposition of non-commercial/ commercially unviable social responsibilities. However the costs of such responsibilities should be transparently assessed and provided by the Government through the budget as a subsidy. It is not appropriate that application of the law or standards be relaxed to allow such costs to be incurred in a non-transparent manner.
7.3 There may be situations where such companies may require special treatment in activities related to the security of State. There may be an enabling provision to relax operation of Companies Act for such companies. Other companies, engaging in commercial activity should compete on the basis of transparency and level playing fields. Preferential treatment to such companies would be to the detriment to the capacity of Indian companies to survive in a competitive market.
7.4 A Government company should be clearly defined in law. It should be one where there is a clear majority stake held by the state- i.e. Central and/or State Government(s). There is no rationale for the definition of Government company being extended to companies set up by Government companies in course of their commercial activities.
hope it may help you
Explanation: False, The government company need not to get registered under special legislation because:
The Government Company is formed and registered under the Indian Companies Act, 1956, which is either as a Private or as a Public company. It does not require any Special Act for its formation. But the directors may be nominated by government or even the shareholders can be appointed by the Board of Directors.