Business Studies

Name the organisation which is formed by passing a special Act of Parliament or State Legislature. Give the features of such enterprise.


SOLUTION
A Statutory Corporation is formed by passing a Special Act of Parliament or State Legislature. Example: Airports Authority of India. Following are the features of such an enterprise:
  • It is formed by a special Act by the parliament or state legislature which defines its power and functions.
  • It has a separate legal entity.
  • The Board of Directors are nominated or appointed by the Government.
  • Capital is either borrowed from the government or the public.
  • Free from Government Accounting and Audit Control.
  • Autonomy in framing policies within the limits of the state legislature.
  • Ease of operations and quick decisions can be taken due to less interference of government.
  • Provides better services than governmental organisations which in turn helps in increasing profit for the corporation. 
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