question_answer

In an organization, there are 51% shares are owned by central government. It has a separate legal entity and it is established under the Indian Companies Act, 2013 and is registered and governed by the provisions of Indian Companies Act, 2013. It is established for purely business purposes and compete with the companies in private sector in true spirit.

(a) Identify the form of organization being referred to in above lines.

(b) Explain any two merits of this form of organization.

(c) Explain any two demerits of this form of organization.

(d) Give two examples of this form of organization.

Answer:

Ans.     (a) Government Company:

(b) Merits:

(i) It is easy to form.

(ii) There is operational autonomy and it has an independent status.

(c) Demerits:

(i) Freedom is name sake only, practically, there is lot of interference from different government bodies concerned.

(ii) There is lack of accountability.

(d) Hindustan Machine Tools, The Hindustan Steel Limited, State Trading Corporation of India, Coal India Limited, Hindustan Aircrafts Limited etc.