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Published by: nitinvasu on Aug 13, 2011
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COMPANY Separate and distinct legal entity Stable and perpetual existence Needs to be registered there are two

types of company 1. ±Private company 2. ±Public company Private Company
y y y y y y y y y

One to fifty shareholders. Name must end "(Pvt) Ltd" Has legal personality. Limited liability. Unlimited continuity. Managed by a board of directors, comprising a minimum of one person. Taxation charged on company's profits. Governed by Companies Act 61 of 1973. Requires the Memorandum of Association, Articles of Association and Certificate of Incorporation to commence with business.

Public Company
y y y y y y y y y

Minimum of one member, Corporations Act s 114 Name must end in "Ltd". Has legal personality. Limited liability. Unlimited continuity. Managed board of directors, with a minimum of one person. Taxed on profits. Governed by Companies Act No. 61 of 1973. Requires for formation all of the Memorandum of Association, Articles of Association, Certificate of Incorporation, Prospectus and Certificate to commence business.

PUBLIC SECTOR BUSINESS ENTITY: Public sector business entities are the form of business organisation which are adopted by the government to do the business. Public Enterprise

Departmental Undertaking (Management)

Government Company

Departmental undertaking (Corporation)

3. Public utilities like petroleum. Types of state enterprises: In India there are three types of enterprises. Example: Life Insurance Corporation. 4. Control: People control the state enterprise through parliament.Characteristic of Public Enterprise 1. Capital: Capital is supplied by government and from public borrowers by government. Air force (Defense). The enterprises are under central government or state government or under the joint ownership of central and state. water supply. through autonomous body do have a separate legal entity of its own. Ownership: The organisation is owned by government as sole owner or major owner. lies with the government. shipyards. it is known as department undertaking or departmental management. 7. perpetual succession where the Act defines powers. Departmental undertaking: when a state enterprise is managed by a government department. 8. It is a corporate entity with common seal. 2. Legal status: it is identical with government. airports. duties. 6. Stability: its stability depends on the stability of the Government of India. Navy. government company is a company in which not less than fifty one percent of the paid up capital is held by central government or by any state government. ports. privileges and management pattern. b. Government Company: any state enterprise or PSU established under the provision of companies Act 1956 is known as Government Company and these are in the nature of Joint Stock Company. railway etc. Example-Railway. automobile etc. Basic industries like iron and steel. 3. Telecast & Broadcast etc. or partly by state and central government or . Public corporation: it is a corporate body created by a special act of the parliament. 2. hospital etc. Suitability of state Enterprise: 1. As per companies act. The Minister in charge controls it for all practical purpose. Infrastructure industry like roads ships. Profit: surplus generated to be a portion of national exchequer. Management: By independent board of directors nominated by government instrument. Board of directors take care of all day to day activities. Post & Telegraph. State Bank of India are all Public corporation. Army. c. 5. Let us discuss each of these one by one a. Risk: Risk if any.

at least 26% should be the stake of government and the responsibility of management rests upon the private counterpart. the management is mainly vested on the partners both (govt and Conflicts over voting rights and ownership issues. it is known as joint sector. Stability: it durable organization and the firms never dissolves on the death and /or insolvency of partner.by a combination of several state government. one of them being a government mainly. 4. 5. Each partner is in a fiduciary relationship. Management: private). 2. it has to pay dividends to the share holders. Ownership: all the partners jointly own the business. in general. the individual partner has both joint as well as individual unlimited liability for the firm.. in private that is on individual 9. Indian telephone. An enterprise established by two or more partners. 7. Disadvantage: Voting for the top management is done by public. 8. Legal status: there is no separate legal entity of partnership business and it is identical with the partner. SALT LAKE ELECTRONIC COMPLEX are all under joint sector. JOINT SECTOR: When government and private sector owns and runs an undertaking together. Control: the control of the business lies with the partners. etc. HAL Ltd. Liability: There is no separate legal entity and there is no fiduciary relationship among the partners. 3. This is basically a partnership between government and private for better resource utilisation. even if it incurs a loss. with equity participation of the Government and private sector. Risk: government can absorbs . 1. . Capital: Partners are expected to contribute equally or otherwise in the capital of the firm (government has no shortage but for private Shortage is there) 6. The examples are ITI Ltd.

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