Government company form of organisation is suitable in the following circumstances:
(i) When the government wants to take over an existing enterprise in an emergency.
(ii) When the State wants to establish an undertaking in collaboration with private enterprises or with foreign countries.
(iii) When there is a need for flexibility in the operations of the enterprises.
(iv) When the government wishes to start the enterprises with a view of transferring it to private management later.

A public corporation is an autonomous body corporate created by a special statute of a state or central government. A public corporation is a separate legal entity created for a specific purpose. It is administrated by a Board appointed by public authority to which it is answerable.

The public corporation is administered by the Board of Directors appointed by public authority to which it is answerable. Generally, the Board is nominated by government on the basis of experience and skills.

Strategic industries like defence and atomic power cannot be better managed other than government departments. Department undertakings can maintain secrecy in their working. So for the security of the country defence industry are always owned and controlled by departmental undertaking.

Industrial revolution helped all-round growth of industries. Private entrepreneurs worked, only for profit motive. The exploitation of consumers and workers by private entrepreneurs became very common. The development of industries was left to the judgement of private enterprises. Therefore, government's control or intervention became a necessity to safeguard the interests of the general public.

A "Government Company" is defined under Section 2(45) of the Companies Act, 2013 as "any company in which not less than 51% of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company".

(i) Department form of organisation of managing state enterprises is the oldest form of organisation. In those days, no distinction was made between the routine functions of the Government and that of the public enterprises.
(ii) Under departmental form of organisation, a public enterprise is run as a separate full-fledged ministry or as a major subdivision of a department of the Government.
(iii) The Delhi Milk Scheme, All India Radio, Doordarshan are other examples of departmental undertakings.

1. Departmental organisations - Indian Railways, Food and Public distribution.
2. Public organisations - Food Corporation of India FCI, ONGC, Oil and Natural Gas Corporation.
3. Government companies - Steel Authority of India Ltd, Tamilnadu Transport Corporation.
4. Board organisations - Tamil Nadu Electricity Board, Tamil Nadu Slum Clearance Board.

There are 4 organisations that come under public sector. They are
i. Departmental organisations
ii. Public organisations
iii. Government companies
iv. board organisations

Following are the areas where the state or central ownership is a preferred form of business organisation:
1. the place where raw materials are available
2. the place where suitable workers are found
3. the place where transportation facilities like roadways, railways, shipping and airways are readily available.
4. The place where political stability is determined.