QS Study

Advantages of Statutory Corporation

The corporation that is created by the Act to serve some special purpose is called a statutory corporation. So these corporations have some advantages. Advantages of the statutory corporation are stated below:

Easy management: The principal merit of this type organization is “Initiative in planning and execution, autonomy is finance and elasticity in administration and freedom from departmental control”.

Opportunity as a public company: It enjoys the usual advantages of a public company such as limited liability transferability of shares etc.

Sovereign immunity: This device enables a government to waive some of its sovereign immunities within limited and well-defined areas. The result is that the corporation can act in its own name rather than that of the state.

Free from rigidity and dilatory actions: It does not suffer from the detects of rigidity and dilatory action which inherent in government administration. At the same time, it retains the flexibility and effectiveness of a private enterprise. On these grounds some views of this organization as the best administrative machinery for public enterprises or public utility services.

Employment opportunity: These organizations can create more employment opportunities in the country for establishment and operations.

Legal entity: These corporations can enjoy the flexibility of independent and separate legal entity.

These corporations can run their business activities more freely than government departmental organization. These are the advantages that statutory corporations enjoy.