Q.What is meant by a 'Government Company' under the Companies Act, 2013?

A Government company is identified not by a separate legal form of its own but by who owns its share capital.

Section 2(45) of the Companies Act, 2013 defines a Government company as any company in which not less than 51 per cent of the paid-up share capital is held by the Central Government, or by any one or more State Governments, or partly by the Central Government and partly by one or more State Governments. The definition also extends to a company that is itself a subsidiary of such a Government company. It is important to note that being a 'Government company' is a matter of ownership pattern, not a distinct legal structure — a Government company can be organised as either a private company or a public company, and it is still subject to the same general provisions of the Companies Act, 2013 that apply to that underlying structure, alongside any special provisions the Act makes specifically for Government companies.

Students sometimes think a 'Government company' is a completely separate legal category distinct from private/public companies, rather than understanding that it describes an ownership pattern layered on top of the private/public classification.