GOVERNMENT COMPANIES

GOVERNMENT COMPANIES (Companies Act, 2013)

As per definition given in the Act “Government company” means any company in which not less than fifty – one per cent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company.

The Act has some special provisions relating to Government Companies. These Sections includes Section 139, 182, 294 and 348.  The Chapter XXIII exclusively deals with the Government Companies.

APPOINTMENT OF AUDITOR (SECTION 139):

I have discussed these provision an earlier post but producing relevant part here.

In case of Government companies and companies directly or indirectly owned or controlled by any Government, the Comptroller and Auditor General of India shall appoint an auditor within a period of one hundred and eighty days from commencement of financial year to hold office till conclusion of the annual general meeting.

In case of Government Company, first auditor shall be appointed by comptroller and Auditor General of India within sixty days of registration of the company.  In case of Comptroller and Auditor General of India does not appoint first auditor within said sixty days, the Board of directors shall appoint such auditor within next thirty days.  In case of failure of Board to appoint first auditor within this period, the members shall appoint such auditor within next sixty days. The first auditor shall hold office until the conclusion of first annual general meeting.

In case of Government Company, causal vacancy shall be filled by comptroller and auditor general of India within thirty days. In case Comptroller and Auditor General of India does not fill within thirty days, then by Board of Directors shall fill vacancy within next thirty days.

The auditor who resigns from the company shall file, within a period of thirty days from his resignation a statement with the company and the Registrar indicating the reason and other facts as may be relevant with regard to his resignation. In case of Government Company, this statement shall also be filed with the Comptroller and Auditor General of India.

POLITICAL CONTRIBUTION (SECTION 182):

Government Company has no power to make a political contribution.

AUDIT OF COMPANY LIQUIDATOR’S ACCOUNTS (SECTION 294):

When accounts of a Government Company have been audited, the Company Liquidator shall forward a copy to the Government which is member of the company.

INFORMATION AS TO PENDING LIQUIDATION (SECTION 348):

If the winding up of a government company is not concluded within one year after its commencement, the Company Liquidator shall file an annual statement duly audited with the Tribunal in case of winding up by the Tribunal and with the Registrar in voluntary winding up. The Company Liquidator shall forward a copy of statement to the government which is member of the Government Company.

ANNUAL REPORT ON GOVERNMENT COMPANIES (SECTION 394, 395):

Where the Central Government is a member of a Government company, the Central government shall cause an annual report on the working and affairs of the company to prepared within three months of its annual general meeting and laid before both Houses of Parliament together with audit report and comments made by the Comptroller and Auditor – General of India. When State Government is member of a government the state government shall prepare an annual report on the working and affairs of the company to prepared within three months of its annual general meeting and laid before houses or both Houses of state legislature together with audit report and comments made by the Comptroller and Audit – General of India.

Where one or more state governments are member of the government company, every state government shall prepare an annual report on the working and affairs of the company to prepared within three months of its annual general meeting and laid before houses or both Houses of state legislature together with audit report and comments made by the Comptroller and Audit – General of India.

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