Para 2.5.5 — MSO (Audit)
Original Rule Text
2.5.5 In terms of the provisions of Section 619B of the Companies Act, some nonGovernment Companies are deemed to be Government companies only for the limited purpose of extending to them the provisions relating to audit of Government companies contained in Section 619 thereof.
# Statutory Bodies
What This Means
Under Section 619B of the Companies Act, certain non-government companies (where the government does not hold 51% shares) can be classified as deemed government companies. However, this classification is only for the limited purpose of extending the CAG's audit provisions under Section 619 to these companies. In other respects, these companies continue to operate as regular non-government companies.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Section 619B allows certain non-government companies to be deemed as government companies
- 2This is only for the limited purpose of audit under Section 619
- 3CAG's audit provisions (appointment of auditors, directions, supplementary audit) become applicable
- 4In all other respects, these companies remain non-government companies
- 5This extends public accountability to companies with significant government interest even without majority ownership
Practical Example
A company in which the central government holds 40% equity and a state government holds 15% equity is not technically a government company (combined holding is 55%, but neither level of government alone holds 51%). However, due to the significant public interest involved, the central government notifies it as a deemed government company under Section 619-B. Now the CAG can appoint its statutory auditor and conduct supplementary audit, though the company is not required to table its annual report in Parliament.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Can any company be made a deemed government company?▼
Does the deemed status affect the company's day-to-day operations?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.