7 Important Differences between Public Corporation and a Government Company

7 Important Differences between Public Corporation and a Government Company are mentioned below:

Public Corporation:

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1. Public Corporation is an instrument of the State

2. It is created by the statute.

3. Once a public corporation is established for certain purpose, it is a very hard to change its sphere and nature of business, unless and until the Parliament or State Legislature amend the original statute.

ADVERTISEMENTS:

4. The object of the establishment has some more objectives, such as services.

5. Examples: ONGC, RTC, LIC, FCI, Damodar Valley Corpn., etc.

6. Prerogative writs can be issued against them.

7. Public Corporations are under the control of:

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ADVERTISEMENTS:

(i) Judicial control;

(ii) Governmental control; and

(iii) Public control.

A Government Company:

ADVERTISEMENTS:

1. Section 617 of the Companies Act, 1956 defines a Government company: “A Government company, in which not less than 51% of the share capital is held by the Central Government, or by any State Government and includes a company which is a subsidiary of a Government Company.”

2. It is created by Articles of Association and Memorandum of Association. It is not a department or an extension of the State. It is not an agent of the State.

3. It has the characteristics of a Private Company. The Articles of Association and Memorandum of Association can easily be amended by the resolutions, meetings of the members of the Government Company.

4. Where the object of the establishment is purely commercial, then Government Company is preferable.

5. Examples: S.C.Co. Ltd, National Construction Co. Ltd.; etc

6. Prerogative writs cannot be issued against them.

7. Government Companies are under the control of:

(i) Judicial control;

(ii) Governmental control;

(iii) Parliamentary control; and

(iv) Public control.

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