State-owned enterprise
A state-owned enterprise (SOE) otherwise known as a: state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, crown corporation, government-owned corporation, commercial government agency, public sector undertaking, or parastatal is a legal entity that undertakes commercial activities on behalf of an owner government. The legal status of SOEs varies from being a part of the government to being stock companies with the state as a regular stockholder. The defining characteristics of SOEs are that they have a distinct legal form and they are established to operate in commercial affairs. While they may also have public policy objectives, SOEs should be differentiated from other forms of government agencies or state entities established to pursue purely non-financial objectives.
Government-owned corporations are common with natural monopolies and infrastructure such as railways and telecommunications, strategic goods and services (mail, weapons), natural resources and energy, politically sensitive business, broadcasting, demerit goods (alcohol), and merit goods (healthcare).
State ownership
State ownership (also called public ownership and government ownership) refers to property interests that are vested in the state or a public body representing a community as opposed to an individual or private party. State ownership may refer to ownership and control of any asset, industry, or enterprise at any level (national, regional, local or municipal); or to non-governmental public ownership. The process of bringing an asset into state ownership is called nationalization or municipalization. State ownership is one of the three major forms of property ownership, differentiated from private, cooperative and common ownership.
In market-based economies, state-owned assets are frequently managed and operated as joint-stock corporations with a government owning either all or a controlling stake of the shares. This form is often referred to as a state-owned enterprise. A state-owned enterprise might variously operate as a not-for-profit corporation, as it may not be required to generate a profit; as a commercial enterprise in competitive sectors; or as a natural monopoly. Governments may also use the profitable entities they own to support the general budget. The creation of a state-owned enterprise from other forms of public property is called corporatization.
