A statutory corporation is a government entity created as a statutory body by statute. It is a corporate body that is created by a special act of Parliament or state legislature having predefined functions, duties, powers, and immunities as defined by the act of the legislature. Here are some features of a statutory corporation:
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Corporate Body: Statutory corporations are artificial persons that are created by the law and are regarded as a legal entity. These corporations are managed by a board of directors who are appointed by the Government. These corporations have the right to enter into contracts and are able to do any kind of business under the company name.
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State-Owned: Statutory corporations are fully owned by the state, and the state lends full support by subscribing to the capital in whole.
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Autonomous Employee System: The employees of the statutory corporations are not regarded as government servants, although being owned by the Government. The employees are recruited and paid as per the rules laid down by the corporation.
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Quick Decision Making: Statutory corporations have significantly less file work and formalities as compared to other forms of organizations, which results in quick decision making.
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Efficient Staff: The employees of the statutory corporation are provided fair wages, better working conditions, and proper training and development programs are initiated for the employees. As a result, employer-employee relations are very cordial and the staff is highly motivated to perform better.
Statutory corporations enjoy autonomy in case of finance and are answerable to the particular legislature under which it was formed. They have internal management and operation freedom, but they are accountable to the state or government legislature that established them.
