AccountancyNEB 2081

What is statutory company?

1

Answer

A statutory company is a type of company that is formed and governed by a special Act of Parliament rather than the general Companies Act. It is created for specific public purposes, such as economic development, social welfare, or regulatory functions.

Key Features of a Statutory Company:

  • Legal Existence: It comes into existence by an Act of Parliament (e.g., Nepal Rastra Bank, Nepal Electricity Authority).
  • Public Purpose: Operates for public welfare rather than profit.
  • No Share Capital: It does not issue shares like a joint-stock company.
  • Government Control: Managed by a board of directors appointed by the government.
  • Immutable: Cannot be dissolved or altered except by another Act of Parliament.

Examples in Nepal include the Nepal Rastra Bank (NRB) and Nepal Electricity Authority (NEA).

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