QS Study

Difference between Statutory Corporation or Public Corporation and Government Joint Stock Company or Government Company

Statutory Corporation and Government Company both are the state enterprise. There is a little difference between the public corporation and the government company. The fundamental difference between the two lies on the basis of their legal authorization and modes of incorporation. Some of the differences between these two companies are as follows:

Statutory company

  • Formation: Statutory Company is formed by the order of president or special Act of parliament or government special ordinance.
  • Declaration of dividend: Usually dividends are not declared in many corporations.
  • Sale of share: These corporations cannot sale share to the public.
  • Autonomy: Statutory Corporations according to their nature can enjoy autonomy in internal matters.
  • Objective: The objectives and scope of activities of the statutory company are mentioned in the related activities.
  • Act: These corporations are controlled by the mimed Act and Ordinance.
  • Capital: Statutory Corporations are formed by the government donation, loan, and paid-up capital.
  • Operation and management: Statutory corporations are operated and managed by the board of directors appointed by the government
  • Size: Statutory corporations arc large in size.
  • Production and Distribution: Except few, most of the statutory corporations are directly related to production and distribution of products and services.

Government Joint Stock Company

  • Formation: The Government Company is formed in accordance with the Company Act-1994.
  • Declaration of dividend: In such an organization dividends are declared and sometimes bonus shares are also issued out of the reserves.
  • Sale of share: 49% shares of this company can sell to investors within a country and abroad.
  • Autonomy: Government Joint Stock Company cannot enjoy the facility of autonomy.
  • Objective: The objectives and scope of activities of Government Company are mentioned in the Memorandum and Association.
  • Act: Government companies are regulated by the Companies Act 1994.
  • Capital: Maximum capital of Government Company is provided by the government. But private investors also invest as per their shares.
  • Operation and management: Government companies are managed and operated by a board of directors including government and private directors. But the maximum number of the board members is appointed by the government.
  • Size: Government companies are large in size but smaller than statutory corporations.
  • Production and Distribution: Government companies are always related to production and distribution of products and services.

At last, we can say that statutory corporation and Government Corporation both arc controlled under government authorization but there are many differences information, control, and operations.