Expert Committee Submits its Report on Determining Methodology for Fixing National Minimum Wage, Ministry of Labour and Employment Click here

Government Company

From Arthapedia
(Difference between revisions)
Jump to: navigation, search
(Created page with "<p>A “Government company” is defined under Section 2(45) of the [http://www.mca.gov.in/Ministry/pdf/CompaniesAct2013.pdf Companies Act, 2013] as “any company i...")
 
Line 14: Line 14:
  
 
==Also See==
 
==Also See==
  [http://arthapedia.in/index.php?title=Public_Sector_Undertakings/Enterprises Public sector undertakings]
+
*[http://arthapedia.in/index.php?title=Public_Sector_Undertakings/Enterprises Public sector undertakings]
  
  

Revision as of 05:28, 11 December 2015

A “Government company” is defined under Section 2(45) of the Companies Act, 2013 as “any company in which not less than 51% of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company”.

Thus, the cardinal feature of a government company is not less than 51% ownership by Central/state government, either individually or jointly.

This definition includes what is generally known as public sector undertakings/ enterprises in India. 

A “subsidiary company” or “subsidiary” of a Government Company would also be categorized as a Government Company provided the Government Company
(i) controls the composition of the Board of Directors; or
(ii) exercises or controls more than one-half of the total share capital either at its own or together with one or more of its other subsidiary companies.

Even if the control referred above is of another subsidiary company of the Government company, the company would still be categorized as a “subsidiary” and hence a government company. Thus, joint-venture companies formed by various Government companies or public sector undertakings are also considered as government companies.

The composition of a company’s Board of Directors shall be deemed to be controlled by another company if that other company, by exercise of some power exercisable by it at its discretion, can appoint or remove all or a majority of the directors;

There are some restrictions on the number of layers of subsidiaries beyond a certain number.

In respect of Government Companies, the Comptroller and Auditor-General of India appoints the auditor and does the supplementary audit through its authorized persons, based on the first audit report. Further, a Government Company’s annual reports have to be tabled in both houses of Parliament / state legislature, depending on the nature of ownership.

A Government company cannot contribute any amount directly or indirectly to any political party, unlike other companies.


Also See


Contributed by

Personal tools
Variants
Actions
Navigation
Concepts
Share Tools
Toolbox
Translate