Autonomous Bodies and Private companies are two different officials from different levels. This article gives a broad explanation of the differences between Autonomous Bodies and Private Companies. From this article, we would be able to understand that an Autonomous body indicates an independent body under Government control constituted in accordance with legislation and contains an authority, not a council. In addition, the article can explain a private company as a firm whose shares are owned internally by a few people, and not traded in public on the open market. Explained below are the difference Between Autonomous Bodies And Private companies.
- Differences based on Definition
An autonomous body is an agency, an authority, a commission, or an institution of the government which forms part of the public service, but has other power over its operations or is otherwise independent under the law that establishes it or under which it was founded. This suggests that the autonomous body means a self-governing body that is subject to the law and contains an authority, not a council.
In other words, the word “autonomous body” refers to an independent or underlying self-governing entity. It has its own committee and Memorandum Of Association(MOA). All of these organizations are under different ministries. Their funding can be 50 percent to 100 percent as per the MOA. Once you are attached to a ministry and your funding is dependent on the Government, you lose a lot of your independence. In fact, you become dependent on the Government for your salary and appointment. Your decisions can be manipulated by a political will.
The governing council or governing body is the apex administrative body of Autonomous Bodies, and it is presided by the minister or secretary of the corresponding ministry. In addition, the Autonomous Bodies have specialized committees with nominated ministry officials, such as the procurement committee, works committee, and finance committee. The annual report is delivered to Parliament each year, and the Comptroller and Auditor General (CAG) examines these Autonomous Bodies.
Private companies are those whose articles of incorporation limit the transferability of shares and prohibit the general public from becoming shareholders. This is the primary distinction between public and private companies. Depending on the jurisdiction in which they are established and how they are formed, private firms are also known as limited liability companies, privately-held companies, limited companies, or private corporations.
Families, partnerships, sole proprietorships, and small to medium-sized enterprises (SME) are examples of private companies. Because these businesses do not have access to the stock market, they must rely on private investments, profits, or bank loans to raise capital.
A private corporation is owned by individuals. Although private firms may offer stock and have shareholders, their shares are not offered through an initial public offering (IPO) and they do not trade on public exchanges. As a result, private corporations do not have to comply with the Securities and Exchange Commission’s (SEC) rigorous tax regulations. These companies’ stocks are generally less liquid, therefore determining their valuations is more complex.
Many private firms are closely held, so just a few people hold the shares. But some extremely large companies remained privately owned. Unless private corporations sell stocks to the public, they can only sell a restricted number of shares and meet other restrictions, they may also not be required to enroll their stock offerings with the Securities and Exchange Commission (SEC).
Private enterprises come in many forms and sizes, from the millions of independently-owned businesses in the United States to the dozens of unicorn startups around the world. Even companies with yearly revenues of more than $25 billion, such as Deloitte, Cargill, and Koch Industries belong under the category of private companies.
- Differences based on Set up
The government creates an Autonomous Body (AB) to accomplish a certain goal. When it is felt that some duties need to be carried out outside of the governmental structure with some amount of autonomy and flexibility, without the daily interference of the governmental machinery, autonomous bodies are established. These are established by the Ministries/Departments responsible for the subject matter and are partly or totally financed through grants-in-aid, based on the scope to which the institutes create internal resources.
The Ministry of Finance regulates these grants through its directives, as well as directives relating to authority to create posts and other matters. They’re typically registered as societies under the Societies Registration Act, and in other circumstances, they’ve been established as statutory bodies under several Acts’ requirements.
A private company, sometimes known as a privately held firm, does not sell or market its stock (shares) on public stock exchanges, but instead sells, owns, and deals or exchanges its stock privately or over-the-counter. A small number of stockholders or business members are present in a close corporation. Unquoted company, closely held corporation, and unlisted company are all phrases that are used in conjunction with each other.
- Differences based on Functionality
Autonomous bodies (ABs) play an important role in the government’s operation because they are involved in a wide range of activities, such as developing policy structures, conducting research, and protecting cultural heritage, among others. This category includes technical, medical, and higher education institutions.
Specific functions need to be performed outside of the government established without the intervention of the machinery on a day-to-day basis, with a certain level of freedom and flexibility.
The private sector is a crucial player, as a significant contributor to national income and the leading producer and employer of jobs in both urban and economic developments. In the developing world, the private sector delivers around 90% of employment (including formal and informal occupations), provides crucial products and services, and adds to taxes and capital flows.
- Differences based on Accountability
Accountability is a well-known and vague phrase. For the current purposes, some responsibilities arising from a liability relationship shall be treated as a reference if a person or body is accountable for carrying out certain services to another person. Firstly, the obligation to fulfill their responsibilities and, secondly, the obligation to accept penalties and directions. The connection is formally superior, subordinate, or primary, where employees or agencies are held accountable to their superiors or directors, and receive instructions from them.
In practice, however, the subordinate agent is the most powerful partner in the partnership, causing well-known issues of agent control. The accountability standards give otherwise weak and defenseless leaders the opportunity to try and restrict powerful organizations and people who serve their needs.
While private sector enterprises (for-profit) are more responsible for their ‘bottom line’ responsibilities, public sector accountability standards, in general, remain unaccountable.
The taxpayer’s money finances Autonomous bodies. However, concerns have arisen that they do not follow the government policy and are responsible for the manner in which government departments are. Although senior officials of the ministry must attend the committee meetings of Autonomous bodies, they are largely not necessary because of their hectic schedules. They appoint young officers who often lack the competence to decide meaningfully during meetings.
- Differences based on Opaque Recruitment
The precise number of bodies is unknown, although it is estimated to be between 400 and 650. A significant number of people work for Autonomous Bodies. The Indian Council of Agricultural Research, for example, which is an autonomous body within the ministry of agriculture, employs over 17,000 people.
However, unlike the government and public sector, where recruiting procedures are standardized and recruitment is handled by a centralized agency such as the Staff Selection Committee (SSC), the Union Public Service Commission (UPSC), there is no such body for such hirings. Therefore, each of these entities, sometimes even throughout Autonomous Bodie in the same Ministry, has a different recruitment and recruitment method.
A Private Company has at least two members and at most 200 members. Current and previous employees are excluded from the computation of members. The general public may not be invited by a privately held company to subscribe to its stocks.
- Differences based on Profit Incentive.
In order to reduce costs and produce products requested of consumers, private businesses have a profit incentive. This drive for profit is often lacking in the autonomous body. Consequently, autonomous bodies are more likely to be excessive and ineffective.
- Differences based on Bureaucracy
It is sometimes harder to remove excess workers in the autonomous body for political reasons than it is for private companies. Private entrepreneurs need not worry about politics and are therefore more likely to make people better if they help to make things more efficient. On the other hand, the autonomous body is more likely to work in inefficient jobs with surplus workers.
- Differences based on Funding possibilities
Most Autonomous Bodies receive funding from the Central Government through subsidies. The Union budget has been individually accountable to Autonomous Bodies since 2016-17 for subsidies figures. However, the remainder of a private company can make it harder to raise money, thus many major private companies will finally decide to make it public by an IPO. While private firms have access to bank loans and some kinds of equity financing, public firms may frequently sell or raise money more easily through bond offers.
From this article, we can deduce that the legal concept of an autonomous body is an independent or self-governing person or organization. Their own laws are being followed. Private institution indicates that people respect the laws of a privately owned company. All the years, however, these ABs remained the only formal place that can convey directly the voices and views of various stakeholders. They add diversity and are more inclusive in shaping government policies.
Private companies are independent legal entities, which are governed by and owned by the board of directors. (Can be a single or separate person, the shareholder, and the board).