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12 Privileges to the Government Companies in India

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12 Privileges to the Government Companies in India, This article is all the relaxation and the exemptions given to the government companies which are not given to the public companies in India. The topic has come due to the stringent provisions in the Companies Act 2013 for the public or private companies but which are not so strict in case of Government companies. This article describes the same in detail here. Check Complete details for 12 Privileges to the Government Companies in India from below article..

12 Privileges to the Government Companies in India

12 Privileges to the Government Companies in India

Benefits to the Government Company:

  1. The first exemption provided to the government is regarding the name of the government which should only mention “Limited” which is “Private Limited” in case of private companies.
  1. The place of holding the general meeting can be at any place approved by the Central Government or at the registered office of the company, which is at registered office mandatory in case of private companies.
  1. Section 149(1) (b) shall not apply to the government, which says that any company should not have more than 15 directors. But this section does not apply to Government Companies, which means they can have more than 15 directors.
  1. A Government company in which the entire paid up share capital is held by Central Government or the State Government Or by both wholly, then Section 162 will not apply, which says that a single resolution cannot be passed for appointment of 2 directors simultaneously, which is not applicable to the Government companies.
  1. The requirement to maintain the register of the Directors under Section 170 and 171 have been relaxed and not applicable in case of Government which gives opinion that there is no need to maintain the register for the directors.
  1. The strict provisions under Section 185 relating to the Loans to Directors have been relaxed and made not applicable to the Government Companies and they are not required to comply with the provisions of the Act.
  1. Along with Section 185 which relates to the Loan to Directors, Section 186 which tells about the Investments by the company is not applicable to the Government companies which are engaged in the business of the Defense Production.
  1. The cognizance of the offence made by any of the Government Company will not be encouraged by any of the courts and have to be dealt with themselves only, unless complaint is being made in writing and the person authorized by the Central Government has made it.
  1. Section 197 relating to the remuneration to the managerial personnel would not apply to the Government Companies and limits prescribed there in would also not form part of the policy of the company. The interpretation of the same means that the government company can provide any amount of remuneration to its director as much as he wants.
  1. The filing of the MCA forms relating to the appointment of the director have been relaxed and not to be filed in case of the appointment of the director by Central Government or the State Government.
  1. Section 129 of the Act, which stands for the Segment reporting incase the company has the segment has been relaxed and the compliance of AS-17 has been made voluntary for the Government Company.
  1. The declaration which needs to be given in the normal company regarding the beneficial interest in the company has been removed in case of the Government Company and not required to follow the same. (Section 89 and 90 not applicable.)

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About Yash Shah

Yash Shah is passionate article writer and has written more than 100 articles in the field of Finance, Insurance, Stock Market, Company Law, Auditing, Taxation and many others. In case of any queries or suggestions, you can reach the author @ [email protected], you can also catch him on facebook @ yashshah299

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