Question

A special feature of government companies is _________.
A. special provision for their audit
B. it is a company of government
C. an association not for profit
D. none of the above

Answer 1

Hint: A Government company is a company in which 51% or more than 51% of the paid-up share capital is owned by the Central Government or a State Government or jointly by both. The government may either own 100% or minimum 51% of the share capital where private enterprises/individuals hold a maximum 49% of the share.

Complete answer: There are several features of a government company.
-a government company should be registered under the Companies Act, 1956
-only the Executive and not the Parliament or the State Legislature is involved in the establishment of such company
-it is a separate legal entity from the government
-minimum 51% of the capital is provided by the government
- the government company's revenues are not deposited into the treasury
-it is mostly free from budgetary, accounting and audit controls and is audited by the agency appointed by the central government i.e. Comptroller and Auditor General of India (C&AG).
-annual report of the company is given to the Parliament or the State Legislature involved

Some of the notable examples of the government company are Hindustan Steel Limited, Hindustan Shipyard, Hindustan Aeronautics Limited, Steel Authority of India Limited (SAIL), Bharat Heavy Electricals Limited (BHEL), Maruti Udyog Limited, Madras Refineries Limited (MRL) and Indian Telephone Industries Limited (ITI)

Thus, option A is the correct answer.

Note: It is important to note that a government company has a major role in the economy for development of the infrastructure and controlling monopoly and restrictive trade practices.