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CMA Intermediate · Business Laws and Ethics · Employees State Insurance Act, 1948

Under the Code on Social Security, 2020, which statement correctly describes the legal status of the Employees' State Insurance Corporation?

The Employees' State Insurance Corporation is a body corporate with perpetual succession and a common seal. It can sue and be sued in its own name, so it is a separate legal entity and not a mere government department.

  1. AIt is a body corporate with perpetual succession and a common seal, and can sue and be sued by its nameCorrect
  2. BIt is an unincorporated department of the Ministry of Labour and cannot sue in its own name
  3. CIt is a body corporate that exists only for a fixed term and has no common seal
  4. DIt is a society that can sue but cannot be sued

Explanation

The Code provides that the Corporation is a body corporate named Employees' State Insurance Corporation, having perpetual succession and a common seal, and it may sue and be sued by that name. The option describing a fixed term or no common seal contradicts this. The Corporation is not a mere government department.

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