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NATURE/CHARACTERISTICS/FEATURES OF STATUTORY CORPORATIONS


NATURE/CHARACTERISTICS/FEATURES OF STATUTORY CORPORATIONS







Meaning: - A Statutory corporation is also called as public corporation. A Statutory corporation is established under a special Act of the Parliament or state legislature. The central government or state government owns the corporation. Examples of such corporations are Life Insurance Corporation, Industrial development bank of India, Unit Trust of India, Export Credit Guarantee Corporation of India Let., and so on.





The main features of Statutory Corporation are explained briefly as under.





1. Establishment: -A public corporation is established under a special act of parliament or state Legislature. The act lists out details in respect of powers, privileges and area of activities of the corporation.





2. Autonomy: -It enjoys autonomous powers in respect of expansion and major administrative decisions. However, approval of the government may be required in case of major policy changes.





3. Objective: -It works on profit objective, and as such its activities are commercial in nature.







4. Decision-Making: -There is quick decision making as compared to departmental form, as it does not have to consult government officials in respect of decision-making.





5. Administration: -The Administration is undertaken by Board of Directors nominated by the Government.





6. Answerability: -It is answerable to the Parliament as regards to its activities.





7. Capital Contribution: -Its capital is wholly owned and subscribed by the Government. The public are not the shareholders of this type of organisation as compared to that of Government Company.





8. Borrowing Power: -Although its capital is contributed only by the Government, yet it can borrow funds from the public. This means public can be the lenders or creditors of this type of organisation.

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