A crown corporation is a government-established and regulated company, mostly used in Canada but applicable worldwide. They pursue commercial matters only and are controlled by legal constraints and public policy. Examples include Air Canada, Canada Post and Canadian National Railway.
A crown corporation is a company established and regulated by the government of a country. The term is mostly used in Canada, but can be applied worldwide. Crown corporations can be nationally or state-owned and wholly or partially owned. They are generally administered like many other branches of government, with the distinct aim of financial objectives. A “crown corporation” is specific to Commonwealth states with monarchies, but is known as a state-owned corporation (SOE) or a state-owned corporation (GOC) in other countries.
The crown corporation, as a judicial or legislative branch of government, conducts business on behalf of the government, and usually with government officials. They have an unusual place in government offices in that they pursue commercial matters only. They are, however, like other branches within a government, controlled by legal constraints and public policy.
In cases like Canada, where a crown corporation is common, the business is technically owned by the “crown”, the current sovereign ruler of the country. In theory, the crown owns all government property, including the crown corporation, but in practice, the businesses are collectively managed and owned by the people of the government and the nation. Examples include Air Canada, Canada Post and Canadian National Railway.
Different levels of control can be exercised in a crown corporation. Sometimes, complete control of a corporation can be implemented with a full staff of government-hired or appointed employees. In some cases, these companies are only equipped with presidents, directors and other symbolic bosses. The government can maintain control of a crown corporation simply by controlling production demands and budgetary decisions.
The development of crown corporations began in the colonial era, when governments tried to exert control over world economies. England, Spain and France all employed crown corporations at the time. They became prominent again in the early 20th century, when manufacturing, transportation, and domestic engineering became important industries. Antitrust laws were passed in response to many of these developments, and the crown corporation became less important around the world with the advent of privatized companies.
In the United States, state-owned enterprises were implemented to combat growing monopolies across the country in telecommunications, healthcare, and banking. In the 1970s, many of these companies were privatized. One of the most important areas of crown corporation around the world is in the oil industry. Many Organization of Petroleum Exporting Countries (OPEC) nations run government-owned oil companies on their own soil.
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