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Statutory Corporation

The document covers Chapter 3 of Business Studies, focusing on statutory corporations, including their creation, features, and examples. It contains multiple-choice questions, fill-in-the-blanks, very short answer questions, and a case-based question related to the Life Insurance Corporation of India (LIC). Key points include that statutory corporations are established by a special Act of Parliament and enjoy autonomy with accountability to the legislature.

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35 views4 pages

Statutory Corporation

The document covers Chapter 3 of Business Studies, focusing on statutory corporations, including their creation, features, and examples. It contains multiple-choice questions, fill-in-the-blanks, very short answer questions, and a case-based question related to the Life Insurance Corporation of India (LIC). Key points include that statutory corporations are established by a special Act of Parliament and enjoy autonomy with accountability to the legislature.

Uploaded by

tushartestingproducts
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Business studies chapter 3

Statutory Corporations – Practice Set

A) Multiple Choice Questions (MCQs)

1. A statutory corporation is created by:

1. Executive order

2. Special Act of Parliament/State Legislature

3. Company law

4. Ministry circular
Answer: 2. Special Act of Parliament/State Legislature

2. Which of the following is a statutory corporation?

1. Indian Railways

2. Life Insurance Corporation of India (LIC)

3. Hindustan Aeronautics Ltd. (HAL)

4. State Bank of India (as a commercial bank)


Answer: 2. Life Insurance Corporation of India (LIC)

3. A statutory corporation enjoys:

1. No autonomy
2. Full autonomy but no accountability

3. Autonomy with accountability to Parliament/Legislature

4. Same rules as departmental undertaking


Answer: 3. Autonomy with accountability to Parliament/Legislature

4. Which of the following is NOT a feature of statutory corporations?

1. Separate legal entity

2. Created by special Act

3. Complete independence without any control

4. Can sue and be sued in its own name


Answer: 3. Complete independence without any control

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B) Fill in the Blanks

1. A statutory corporation is established by a ________.


Answer: Special Act of Parliament/State Legislature

2. The accounts of statutory corporations are presented to the ________.


Answer: Parliament/State Legislature
3. The Life Insurance Corporation of India was set up in the year ________.
Answer: 1956

4. A statutory corporation combines efficiency of the private sector with ________ of the public
sector.
Answer: Accountability

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C) Very Short Answer Questions

1. Give two examples of statutory corporations in India.


Answer: LIC, ONGC

2. Who controls a statutory corporation?


Answer: Controlled by the Act under which it is created and accountable to
Parliament/Legislature.

3. Why are statutory corporations said to have more flexibility?


Answer: Because they are not bound by strict government rules and regulations.

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D) Case-based Question

Case:
The government of India wants to provide efficient and reliable life insurance services to the
public. It creates a business entity through a special Act of Parliament in 1956. The entity is
owned by the government, has its own legal identity, and is accountable to Parliament.

Questions:

1. Identify the form of public sector enterprise created.


Answer: Statutory Corporation (LIC of India).
2. Mention two features of this form.
Answer:

Created by a special Act of Parliament.

Separate legal entity with operational autonomy.

3. State one merit and one limitation of this form.


Answer:

Merit: Greater autonomy and efficiency.

Limitation: May face political interference.

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