Any company in which not less than 51 per cent of the paid up share capital is held by the Central Government or by any State Government or Governments or partly by the Central Government and partly by one or more State Governments is called a Government company. A company subsidiary of a Government company is also a Government company.
The auditor of a Government company shall be appointed or reappointed by the Comptroller and Auditor General of India.
Annual report prepared within 3 months of the company’s annual general meetings and accounts of the Government Company are to be placed before both the Houses of Parliament and the state Legislature as the case may be. The audit of these companies is carried out under the supervision of the Comptroller and Auditor General of India. These companies are regulated by the provisions of the Companies Act. If a Government company is incorporated and registered outside India, such a Government company comes within the definition of an unregistered company section 582 (b) and for the purposes of jurisdiction the company shall be deemed to be registered in the State where its principal place of business is situated
The Central Government under section 620 of the Act is empowered to declare by notification in the Official gazette that any of the provision of the Act shall not apply to any government company or what provisions shall apply to any such company.
The concept of the Government companies is enlarged by the Amendment Act, 1974 provides that the provisions of audit of Government Companies shall apply to companies in which not less than 51 per cent of the paid up share capital is held by one or more of the following or any combination thereof, as if it were a Government Company namely:
1) The Central Government and one or more Government Companies.
2) Any state Government or Governments and one or more Government Companies.
3) The Central Governments, one or more state Governments and one or more Government Companies.
4) The Central Government and one or more corporations owned or controlled by the Central Government;
5) The Central Government, one or more State Governments and one or more corporations owned or controlled by the Central Governments.
6) One or more corporations owned or controlled by the Central Government or the state Government;
7) More than one Government Company.
A company incorporated outside India is a foreign company.
Sections 592 to 608 of the Companies Act apply to foreign companies which:
i) After 1st April 1956, establish a place of business within India.
ii) Before 1st April 1956, have established a place of business within India and continue to have an established place of business within India on 1st April 1956.
If not less than 51% of the paid up share capital (whether equity or preference) of a company incorporated outside India and having an established place of business in India, is held by one or more citizens of India or by one or more bodies corporate incorporated in India. Whether singly or in the aggregate, such company shall comply with such of the provisions of the Act as may be prescribed with regard to the business carried on by it in India, as if it were a company incorporated in India. The foreign company has to comply with following regulations:
Documents: Within 30 days of the establishment of the place of business in India, the foreign company shall deliver to the Registrar of the state where the principal place of business is situated and to the Registrar at New Delhi, following documents:
1) a certified copy of the Charter, statutes or Memorandum and articles of the company;
2) The full address of the registered or principal office of the company.
3) A list of the directors and secretary of the company.
4) Names and addresses of any person or persons in India authorized to accept on behalf of the company services of process and any notices or other documents required to be served on the company.
5) The full address of the office of the company in India which is deemed to be its principal place of business in India.