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What distinguishes the legal personality of a corporation from its shareholders?
What distinguishes the legal personality of a corporation from its shareholders?
Which characteristic indicates that a corporation's property is not considered government property?
Which characteristic indicates that a corporation's property is not considered government property?
What is implied about the government’s control over public corporations?
What is implied about the government’s control over public corporations?
In the context of legal characteristics, what does the Tamlin v Hannaford case illustrate?
In the context of legal characteristics, what does the Tamlin v Hannaford case illustrate?
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What does the legal concept of distinct personalities imply regarding the rights of a corporation?
What does the legal concept of distinct personalities imply regarding the rights of a corporation?
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What distinguishes a public corporation from the Government of Malaysia?
What distinguishes a public corporation from the Government of Malaysia?
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Which of the following best describes the primary function of Bank Negara Malaysia (BNM)?
Which of the following best describes the primary function of Bank Negara Malaysia (BNM)?
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Which classification of public incorporation focuses on providing financial support for developmental activities?
Which classification of public incorporation focuses on providing financial support for developmental activities?
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Which of the following organizations would be classified as a Financial Institution?
Which of the following organizations would be classified as a Financial Institution?
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Which of the following is NOT a characteristic of promotional and developmental undertakings?
Which of the following is NOT a characteristic of promotional and developmental undertakings?
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Which type of public enterprise is responsible for producing goods and services for profit?
Which type of public enterprise is responsible for producing goods and services for profit?
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Which of the following statements about public enterprises is true?
Which of the following statements about public enterprises is true?
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What is the primary purpose of companies classified as 'Commercial and Industrial Undertakings'?
What is the primary purpose of companies classified as 'Commercial and Industrial Undertakings'?
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Which of the following bodies is a recognized example of a promotional and developmental undertaking?
Which of the following bodies is a recognized example of a promotional and developmental undertaking?
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Which of the following is NOT a function of Bank Negara Malaysia?
Which of the following is NOT a function of Bank Negara Malaysia?
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Study Notes
Law 309: Chapter 9 - Public Incorporations
- Public corporations are entities distinct from the government, engaging in trade, business, and commerce.
- Modern governments participate in these activities through public corporations.
- Reasons for public incorporations include socio-economic development, promoting public control of essential resources, and reducing wealth concentration.
- Public corporations are instrumental for economic development, particularly in rural areas.
- Lack of financial/managerial capacity in private individuals is another motivation for the public sector to participate.
- Public corporations are often used to plan and develop specific regions of the country.
Reasons for Growth
- Economic Regeneration: Public corporations aim to revitalize the economy, improve people's well-being, and control essential resources.
- Economic Development: They serve as instruments for economic growth, particularly for rural communities.
- Control of Resources: These entities facilitate governmental control over economic resources.
- Bumiputra Equity: Government policy aims for 30% indigenous ownership/employment in industrial and commercial sectors.
- Financial/Managerial Capacity: Limited private sector capacity in large-scale projects necessitates public sector involvement.
- Regional Development: Specific regions are targeted for comprehensive and integrated development through established bodies.
Legal Characteristics of a Corporation
- A corporation has legal personality independent of its shareholders.
- Government control over a corporation's operations does not negate its separate legal identity.
- Corporate property is not government property and does not enjoy government immunities.
- Corporate personnel are not considered government employees. Legal requirements for corporations are similar to those for ordinary individuals/entities.
- Legal cases, such as Tamlin v Hannaford (1949), and N.T.S. Arumugam Pillai v Government of Malaysia (1977), clarified the legal separation of corporations from the government. In these cases, courts established that corporate property is subject to normal laws, and government property exemptions don't apply to corporations.
Classification of Public Incorporations
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i. Financial Institutions:
- Bank Negara Malaysia (BNM) is the main financial institution (established 1959). It manages currency, national reserves, and acts as the government's banker. BNM's purpose is to develop a sound financial system for the country's economy.
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ii. Promotional and Developmental Undertakings:
- Their purpose is to sponsor and promote development, particularly in formative stages, often needing governmental financial aid. Examples include MARA, FELDA, and UDA.
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iii. Commercial and Industrial Undertakings:
- These agencies focus on production, trade, or commercial activities. They either offer public services or produce, sell, and purchase goods. Examples include FAMA, MAS, and PERNAS.
Organisation of Public Enterprises
- i. Departmental Undertakings: The Malayan Railway Administration is an example. Government property rights associated with this body are vested in the Federal Land Commissioners.
- ii. Government Companies: These companies are registered under the Companies Act. Government is the primary shareholder; they maintain control over the company's affairs with the right to make appointments and dismissals.
- iii. Statutory Corporations: Established by specific legislation. For instance, the Federal Agricultural Marketing Authority (FAMA) operates under the Federal Agricultural Marketing Authority Act 1965, aimed at improving the agricultural product market. Statutory bodies and government companies are distinct.
Control Over Public Enterprises
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i. Audit Control: Yearly accounts for public corporations must be audited by the Auditor General according to the 1980 Act. This Act is specifically designed for statutory bodies.
- Statutory corporations' accounts are subject to auditing requirements.
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ii. Parliamentary Control: Parliament receives annual reports from statutory corporations but often lacks detailed discussions or probing of the companies' operations.
- Limited parliamentary control over public enterprises.
- Procedures involving public corporations' annual accounts differ between statutory and non-statutory forms.
- iii. Ministerial Control: Ministers are responsible for supervising related sectors of public corporation's operations. They have the power to appoint members of the corporations.
- iv. Judicial Control: Courts intervene in public corporations' activities through the doctrine of "ultra vires," ensuring adherence to their defined objectives, powers, and acts outlined by statutes.
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Description
Explore the key concepts of public corporations in Law 309, Chapter 9. This quiz delves into their roles in economic development, particularly in rural areas, and the reasons for their growth including socio-economic benefits and resource control. Test your understanding of how these entities operate distinctly from government functions.
