Disadvantages of Statutory Corporation

Disadvantages of Statutory Corporation

Disadvantages of Statutory Corporation

The corporation which is created by the Act to serve some special purposes is called statutory Corporation. In spite of these advantages, statutory corporations have some disadvantages also. Disadvantages of statutory coronation are given below:

Ministerial intervention: The main disadvantage of such organization is that ministers or high officials of the country extend their undue influence in the administration of the company the ministerial meddling with the internal management and organization adversely affects the working of the organization.

Costly operations: In some cases where the nature of the work is substantially commercial or manufacturing, personnel of the corporation do not give much emphasis on the cost elements and thus nuke the operations more costly.

Political influence: It has got to function within the framework of parliamentary control and ministerial responsibility. This often exposes the organization to some political or outside influences.

Overcome public interest: Sometimes the controlling authority may be in the hands of a small and unrepresentative group who may seek their own self and ignore the objectives of the public enterprise.

High tax: These organizations are not fretted from tax and duties as like other some organizations.

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