Statutory companies, Business Law and Ethics

Statutory Companies:

A statutory company is formed by a specific Act of Parliament, primarily as a means of conferring on it some powers which would not be available to it if it were formed by Royal Charter or registration under the Companies Act. A statutory company has no shareholders and its initial capital is provided by the Treasury. Therefore it is expected to operate according to commercial principles and to make profits. If it makes losses and becomes unable to pay its debts so there its property can be attached with its creditors but it cannot be wound up on the application of any creditor. However, the government will usually come to its aid if it has no cash or other assets to pay its creditors. Examples of such companies are the water, gas, electric and railway companies formed in England during the last century. Most of these companies were nationalised by the British government after the second world war and their functions transferred to public boards and corporations set up by Acts of Parliament. The public boards and corporations resembled those that were later set up in Kenya by the colonial administration, such as the Agricultural Finance Corporation, and the Wheat Board.

Posted Date: 1/12/2013 1:55:17 AM | Location : United States

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