question_answer

Why is the government company form of organization preferred to other types in the public sector?                                                               

Answer:

Ans.     Government company form of organization is preferred to other forms of organizations due to it advantages over other forms. These advantages are as follows:

1. It is registered or incorporated under Companies Act.

2. It has a separate legal entity.

3. Management is regulated by the provision of Companies Act.

4. Employees are recruited and appointed as per the rules and regulations contained r in Memorandum and Articles of Association.

5. The government company obtains its funds from government shareholdings and other its private shareholdings. It can also raise funds from capital market.

6. It can be easily formed as per the provision of Companies Act. Only an executive decision of government is required.

7. It enjoys autonomy in management decisions and flexibility in day to day working.

8. It can appoint professional managers on high salaries.