A company incorporated by a special Act of the legislature is called a statutory company. It is an autonomous body and is free from government control in respect of its internal management. It can be approved by either the Central or State Legislature Statutory Company. Bangladesh Bank, State Bank of India is an example of such a company. These companies are public enterprises brought into existence by a Special Act of the Parliament. It is supposed to be self-sufficient in financial matters. However, in case of necessity, it may take a loan and/or seek assistance from the government.
It has a separate legal existence. The government wholly provides its capital. Despite the fact that statutory companies have limited liability, they are not always required to utilize the limited title. These companies are formed mainly with the intention to provide public services like gas, water, electricity, etc. They are required, however, to provide annual reporting to the Legislature-Parliament. It is a company which is enabled by a specific act of Parliament and whose objective, authorization, power, and operation define by such an act is called a statutory company.
- Management: These companies are managed by a board of directors that is in turn, managed and appointed by the government. These are managed by the Board of Directors, appointed by the government.
- Accountability: These companies are accountable to both public and private parliament. This ensures public accountability. Accountability is often inspected through audits.
- Appointment: These companies can hire and promote without the influence of the government. They can freely recruit people and can give promotions and transfers to any employee according to the company requirement.
- No interference: Statutory Corporation can have its own pattern. The daily tasks of the statutory company cannot be interfered with by the governing body. There is no political interference in day to day working of the corporation.
- Objectives: Objectives of the company are often commercially based, and the statutory company holds liability for its financial decisions. It works on profit objective and as such its activities are commercial in nature.