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Justify the following statement:Statutory Corporations need not follow the Companies Act, 2013. |
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Answer» 1. Statutory corporation is formed or created by passing a Special Act in Parliament or State legislature. 2. The Act or Special Statute which is passed in the Parliament defines it powers, objectives, aims, duties, functions, rules and regulations governing its employees and its relationship with the Government department. 3. Statutory Corporation prepare its own budgets and recruits employees on the terms and conditions determined by its Board of Directors. 4. As Statutory Corporation is regulated as per the provisions made in Special Act of Parliament or State Legislature, it need not follow the provisions and directives given as per the Indian Companies Act, 2013. They need not have a Memorandum of Association or Articles as they have to strictly follow the Special statute. 5. Thus, Statutory corporation need not follow the Companies Act. |
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