Q.(a) What are the features of Government Company ? (any 5)

(a) A government company is registered under the Companies Act, is at least 51% government-owned, is a separate legal entity run by a board, with staff who are not government servants. (b) Short-term finance comes from trade credit, bank credit, commercial paper, factoring and bills discounting.

This is a Part-IV OR-choice; both alternatives are answered in full.

(a) Features of a Government Company (any 5)

A government company is a company in which not less than 51% of the paid-up share capital is held by the government. Its features:

1. Registered under the Companies Act — it is formed and registered like any other company under the Companies Act, 2013.
2. Majority government ownership — at least 51% of its paid-up capital is held by the central and/or state government.
3. Separate legal entity — it can own property, enter into contracts and sue or be sued in its own name.
4. Managed by a board of directors — it is run by a board nominated largely by the government.
5. Employees are not government servants — the staff are appointed and governed by the company's own service rules, not civil service rules.
6. (Also) Its funds come from government and other sources, and its accounts are audited by an auditor appointed on the advice of the Comptroller and Auditor General (CAG).

(b) Kinds of Sources of Short-Term Finance (any 5)

Short-term finance is required to meet working-capital needs, usually for less than one year. Its sources are:

1. Trade credit — credit extended by suppliers allowing the firm to buy goods now and pay later. …