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Differens b/w Public Company, Public Sector Company and Govt.Company Or Govt. Undertakings

18 March 2019

Please discuss broadly the main diference b/w PublicCompany and public sector company and Govt.Company Or Govt.Undertakings with Define

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venkata krishna reddy (chartered accountant) (792 Points)
Replied 18 March 2019

If a Government Company is registered under Companies Act,1956 or Banking Act, it is Public Sector Enterprises (PSE). These are predominantly owned by Government and which are managed by a Government appointed Chairman and Managing Director.Ex-SBI,BHEL,ONGC,ITDC hotels

Public Sector undertakings refer to commercial ventures (registered under separate act of Parliament) of the Government where user fees are charged for services rendered. The tariff/fees may be market based or subsidized. They are usually fully owned and managed by the Government such as Railways, Posts, Defence Undertakings, Banks etc.

Public Sector companies are companies in which the government (union or state) have controlling shareholding. Controlling here means that they have enough shares to appoint directors and generally dictate the business development path the company takes.

Examples:

Indian Oil Corporation Limited: Government of India owns nearly 57% of shares (source: Indian Oil Corporation).
State Bank of India: GoI owns about 57% of shares (source: State Bank of India)

Private Sector companies are companies in which such governmental control does not apply.

Example:

Reliance Industries Limited: 0% Government shareholding (Reliance Industries)

A Public Sector Undertaking, known as PSU, is a company in which majority of the stake (more than 50%) is owned by the Government. Depending upon whether it is owned by Central Government or State Goverment, you call them as Central PSU and State PSU.

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