Question

Short Answer Type Questions: Explain the meaning and features of public corporation.

Answer 1

A public corporation or statutory corporation is formed by a special act by the parliament or state legislature. The act specifies the rules and regulations as well as the powers and functions of the employees. It is funded by the Government. It is a separate legal entity. Example: Life Insurance Corporation of India.

Following are the features:

• Legal entity: It is an artificial person and is a legal entity. It has the right to take part in contracts.
• Ownership: It is owned by the state.
• Authority: It is answerable to the parliament legislature or state assembly with respect to whoever has given the order to form it.
• Administration: The administration is undertaken by the Board of Directors nominated by the government.
• Borrowing power: It is allowed to borrow funds from the public.