Question

merits of government company pls answer fast

Answer 1

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Answer 2

The advantages of government company are as follows:-
(1)Easy Formation: Government company is formed and registered under the Indian Companies Act, 1956, either as a Private company or as a Public company. It does not require any Special Act for its formation.

(2) Huge Capital:A government company requires huge capital for its business operations. The company is free to collect capital through its own sources & it can even borrow the money depending upon its requirements.

(3) Management: Management of government company is vested in the hands of Board of Directors. The directors may be nominated by government or even the shareholders can appoint the Board of Directors. The Directors are free to take any decision as regards to company's policies.

(4) Professional Management: The government company due to huge capital & large size of organization can easily afford to appoint professionals resulting in increased efficiency of the company.

(5) Flexibility: A government enjoy full flexibility in its operations. It is free to adopt different changing policies according to changing business environment.

(6) Sectional Development: The government company helps in development of backward areas & weaker sections which are usually neglected by private sector.

(7) Separate Legal Status: A government company, like a joint stock company is an incorporated association & artificial person having a common seal & perpetual succession. It has a separate legal entity from its owners.

(8) Exemptions: A government company is exempted from Budgetary Accounting & Audit. But, its auditors are appointed by the government as per the guidance of controller and Auditor General of India. Also it may get concession in taxes & other duties which other organizations may not get.