IV. INSTITUTIONAL UNITS AND SECTORS
C. The non-financial corporations sector and its sub-sectors (S.11)
| 4.68. | Non-financial corporations or quasi-corporations are corporations or quasi-corporations whose principal activity is the production of market goods or non-financial services. The non-financial corporations sector is composed of the following set of resident institutional units:
(a) All resident non-financial corporations, irrespectively of the residence of their shareholders;
(b) All resident non-financial quasi-corporations including the branches or agencies of foreign-owned non-financial enterprises that are engaged in significant amounts of production on the economic territory on a long-term basis;
(c) All resident NPIs that are market producers of goods or non-financial services. |
| 4.69. | Some non-financial corporations or quasi-corporations may have secondary financial activities: for example, producers or retailers of goods may provide consumer credit directly to their own customers. As explained more fully below, such corporations or quasi-corporations are nevertheless classified as belonging in their entirety to the non-financial corporate sector provided their principal activity is non-financial. Sectors are groups of institutional units, and the whole of each institutional unit must be classified to one or other sector of the System even though that unit may be engaged in more than one type of economic activity. |
| 4.70. | The non-financial corporate sector is divided into three sub-sectors on the basis of the types of institutional units that exercise control over the corporations, quasi-corporations or market NPIs. While control over corporations may be guaranteed by owning or controlling a majority of voting shares, it is usually possible to secure control by owning or controlling considerably less than half the voting shares, depending upon the distribution of voting shares among shareholders as explained earlier. However, as the minimum shareholding that is sufficient to secure control may vary from corporation to corporation, it is not possible to specify a figure below 50 per cent that is guaranteed to secure control. As a practical guideline, therefore, it is recommended that control should normally be attributed to an institutional unit, or organized group of units, only when they own or control (e.g., through a subsidiary) more than 50 per cent of the voting shares of a corporation unless there is other evidence that control is exercised. |
The sub-sectors of the non-financial corporations sector
| 4.71. | Three sub-sectors are distinguished:
(a) Public non-financial corporations;
(b) National private non-financial corporations;
(c) Foreign controlled non-financial corporations. |
Public non-financial corporations (S.11001)
| 4.72. | These consist of resident non-financial corporations and quasi-corporations that are subject to control by government units, control over a corporation being defined as the ability to determine general corporate policy by choosing appropriate directors, if necessary. The government may secure control over a corporation:
(a) By owning more than half the voting shares or otherwise controlling more than half the shareholders' voting power; or
(b) As a result of special legislation, decree or regulation which empowers the government to determine corporate policy or to appoint the directors. |
| 4.73. | In order to control more than half the shareholders' voting power, a government unit need not own any of the voting shares itself. For example, a public corporation could be a subsidiary of another public corporation in which the government owns a majority of the voting shares. Public quasi-corporations are quasi-corporations owned directly by government units. |
| 4.74. | Public corporations do not include any non-market NPIs controlled and financed by government units, such NPIs being included in the general government sector. |
National private non-financial corporations (S.11002)
| 4.75. | These include all resident non-financial corporations and quasi-corporations that are not controlled by government or by non-resident institutional units. Such corporations may, or may not, be controlled by other resident institutional units. They are simply characterised by the fact that they are not subject to control by the government or from abroad. The sub-sector also includes market NPIs producing goods or non-financial services: for example, market NPIs engaged in providing education or health services on a fee-paying basis, or trade associations serving enterprises. |
Foreign controlled non-financial corporations (S.11003)
| 4.76. | These consist of all resident non-financial corporations and quasi-corporations that are controlled by non-resident institutional units. The sub-sector includes:
(a) All subsidiaries of non-resident corporations (but not associates of non-resident corporations);
(b) All corporations controlled by a non-resident institutional unit that is not itself a corporation: for example, a corporation which is controlled by a foreign government; it also includes corporations controlled by a group of non-resident units acting in concert;
(c) All branches or other unincorporated agencies of non-resident corporate or unincorporated enterprises that are engaged in significant amounts of production on the economic territory on a long-term basis and that are, therefore, treated as resident quasi-corporations. |
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