disadvantages of government company class 11

Separate Legal Entity: A Government Company has a separate legal entity independent of the Government. Inefficient performance of employees affects the growth & operations of companies. Uploader Agreement. Privacy Policy 9. 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Autonomy in Administration: Statutory corporations enjoy autonomy in the administration of the corporation. 2 Government Companies 3 Features of a Government Company 3.1 Merits of a Government Company 3.2 Limitations of a Government Company 3.3 Suitability of a Government Company 4 Role and Importance 4.1 1. These companies can be just formed by the governments executive decision. All the provisions mentioned in the Companies Act are applicable to Government companies unless something else is specified. 2. Through Government Company: Definition, Features, Advantages, Disadvantages of government. Do not include your name, "with regards" etc in the comment. India is enrolled as a developing country, with a mixed economic system in regard to trade. Flexibility in operation. Development of the Infrastructure 4.4 4. 4. The Government Company is subject to It is relatively free from ministerial active, alert and disciplined. 5. It is established by the government of the country to take care of production of various goods and services for the greater population of the country. so the government of any country can establish any company according to the suitability and its available resources. Class 11 ocm chapter 5 Merits and demerits of Government company class 11 not its Features of government company and other related topics of Ocm chapter 5 cl. control and political interference, in its day-to-day functioning. It can acquire property; can make contracts and can file suits, in its own name. In partly owned more than 51% of shares are held by the government & rest is owned by private individuals. (b) Lack of training & development. The advantages of the Government Company are enumerated below: The procedure of establishment is simple. Also proper work culture is missing in India and as workers resort to strikes. It means that one does not have to acquire separate legislation from the Parliament for the formation of a Government Company. 3. 1. 2. Board of Directors Packed with Yes-Men. These companies have freedom in name only & are not independent in decision making. The Government of any country can establish any type of company at its discretion. Many times workers go on strike & labour unions work with selfish. Copyright 10. The key personnel of a Government company are often deputed from Government departments. Government companies are fully under the control of the government. Content Guidelines 2. Government of India has categorised itss company according to the capital invested in them. The working of the company is exposed to Press criticism: Therefore, management of the Government Company often gets demoralized and may not take initiative to come out with and implement something innovative. the government nor for the public at large. While a Government Company is a nonprofit institution established by the government for better utilisation of its available resources. manner. Sometimes it had to face criticism of public regarding its performance. In this context we will understand what a Government Company is? They are unable to run the company, in a businesslike manner. The whole performance is presented to the public through the press. A Government company can employ professionally qualified managers; because it has its own personnel policies. PSU is the abbreviated form of Public Sector Undertakings. Read this article to learn about the meaning, features, advantages and limitations of government company. Company form of organisation structure. 3. A government company is formed easily as no statute is required to be enacted. 5. preservearticles.com All rights reserved. advantages of government company3. You will be notified via email once the article is available for improvement. 14. These deputationists generally Reasons for Government intervention Equality. They are least affected by adverse conditions in the economy. Company can be changed by simply altering the Memorandum of Association of the The site owner may have set restrictions that prevent you from accessing the site. By using our site, you There is a lack of cooperation between employees & managers in government companies. They are unable to run the company, in a businesslike manner. the major shareholder); who are yes-men These people interfere in day to day functioning of these companies. They regulate their own personal policy following the Articles of Associations. There is a huge list of Government Companies in India. The government tries to operate these companies consistently with the market which results in a healthy economy of the country. Independent character of a Government 9. Lastly, where the Government of the country wants to launch an organization by collaborating with some private organizations. The Annual Report of a Government In modern days we see industries performing the job of processing raw materials in a single place. Government Company: Features, Role and Importance, Merits, Examples The highest rank is awarded to 9 companies with the highest investment termed as 'Navratnas.' Defeats the main Purpose: Government exercises major control over the functions and management of a Government Company, as it is a major shareholder of the company. This article gives information about the disadvantages or the demerits of government companies. Disadvantages / Limitations of Government Companies. Thekey personnel ofa Governmentcompany Devi Jalsa service sector PSU named Bharat sanchar Nigam limited (BSNL) working in the area of telecommunication. provisions of the Companies Act; which keeps the management of the company To name some examples are National Aluminium Company Limited (NALCO), Bharat Heavy Electronics Limited (BHEL), National Thermal Power Corporation Limited (NTPC) among others. (viii) Accountability to the Parliament/State Legislature: The Annual Report of a Government company is placed before the Parliament or the State Legislature. Government companies are easy to be established. The forms of public sector enterprises are Departmental Undertaking, Statutory Corporation, and Government Company. on YouTube comment section.#Government_company #Xraybrain #fycom_ocm #ocmchapter5#11thcommerce Created by X-ray brainTHANKS FOR WATCHING THIS VIDEO These people get fix salaries & wages irrespective of their performance. Thank you for your valuable feedback! Ministerial control. Accounting and Audit Practises are done by Chartered Accountants appointed by the government. In reality, politicians, ministers, Government It has a separate legal entity and so can manage its affairs on its own. It also helps the general population to get a glimpse of the actual performance of the companies. ADVERTISEMENTS: 4. (iii) A Fraud on Companies Act and Constitutions: A Government company is criticized as being a fraud on the Companies Act and on the Constitution. On the other hand, complying with corporate governance regulations can be difficult, particularly for smaller companies. A Government company can be easily formed under the Companies, Act, just by an executive decision of the government. Developed by Therithal info, Chennai. Control on Monopoly and Restrictive Trade Practices The capital of the company is to be held wholly or partially by the state government and the central government together or individually. Content Guidelines 2. What is a Government Company? Nomination of directors by Government. Incorporation: A Government Company is registered under the Companies Act, 2013 or any previous Company Law, and is governed by its provisions. Government companies are required to prepare annual reports of their performance. Some kind of organizational framework is needed for the Governments participation in the business and economic sectors of the country to function. Under section 2(45) of the Companies Act 2013, a Government Company is defined 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. The working of the Meaning of Government Company Government Company is those companies where major shareholding is held by the government. (6) Wastage of Resources: There is a good amount of wastage of resources. Image Guidelines 5. Government companies enjoy a long life span. A Government company can be easily A Government company may either by wholly owned by the Government, in which case 100% capital is provided by Government; or may be owned by the Government (holding minimum of 51% share-capital) and private concerns/individuals (holding maximum of 49% share capital). The annual report of the government company is placed before the Parliament/State Legislature. Raw materials remain unutilized. The Government Company exercises more than half of the control of voting rights on the subsidiary. General disadvantages of Government Undertakings. (7) Low labor productivity: The government companies suffer from the problem of low labor productivity. Following are the salient features of a Government company: (i) Registration Under the Companies Act: A Government company is formed through registration under the Companies Act, 1956; and is subject to the provisions of this Act, like any other company. As these companies are formed by the government, they dont require any bill to be passed in the legislature. The government may not timely take actions or decide as per company requirements. 2. Finance: The State or the Central Government contributes at least 51% of the capital of a Government Company, and it can raise the rest of the capital from the capital market. This all affects the working environment & leads to distrust among employees. The remaining companies with lowest investment are known as miniratnas. (4) Lack of Autonomy: Government companies though autonomous bodies, but can not take any decision without taking permission from government. The Annual Report of a Government company is presented to the Parliament/ State Legislature. The merits of government companies: 1. The Public Owned Companies are also called the Government Companies. This is a strictly moderated site. If a companys 51% of voting powers are held by the state or central government individually or combined both, they are deemed as Government Companies. Prohibited Content 3. However, this feature of the Government Company defeats the whole purpose of registering and establishing it under the Companies Act. Content Filtrations 6. 3. They function according to the decisions cast by the majority directors who eventually represent the government, this way the government controls the BOD or Board of Directors. In recent times there has been criticism of incompetence of the authorities running the Government Companies. Prohibited Content 3. 4. The establishment of a Government Company is suitable in three cases as follows: Chapter 2: Forms of Business Organisation, Chapter 3: Private, Public, and Global Enterprises, Chapter 6: Social Responsibilities of Business and Business Ethics, Chapter 7: Formation of a Company (Not in CBSE Curriculum for the Academic Year 2022-23). A public enterprise may take any particular form of organization depending upon the nature of its operation and its relationship with the Government. lack expertise and commitment; Concept of departmental undertakings - BYJU'S Online learning Programs Disadvantages. manage its affairs independently. officials, interfere excessively in the day-to-day working of the government Professional managers are hired by the government to manage their companies. Which type of companies are established by the government of any country ? 2. A government company can

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