Previous Year Question
A company is a Government Company if at least ______ percent of its capital is held by the Government.
Correct Answer: A
Detailed Solution
According to Section 2(45) of the Companies Act, 2013, a Government Company is a company in which not less than 51% of the paid-up share capital is held by the Central Government, one or more State Governments, or jointly by the Central Government and one or more State Governments. Thus, a government holding of only 50% is not sufficient; the statutory threshold is at least 51%.
The question uses the general term “capital”, but the legally precise expression used in the Act is paid-up share capital. The definition also includes a subsidiary of such a Government Company.
Thus, if the Government holds 51% or more of the paid-up share capital, the company can fall within the statutory definition of a Government Company; holdings of 49% or 50% do not satisfy this threshold.