Australian Bureau of Statistics
1218.0 - Standard Economic Sector Classifications of Australia (SESCA), 2002
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 13/09/2002
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Corporations and quasi-corporations
2.15. In Australia, most companies registered under corporations law meet the SNA93 definition of a corporation. These include proprietary companies, limited liability companies and no liability companies. However, some registered companies are not engaged in market production as defined in SNA93 and are classified as government units or NPIs (see paragraph 2.37). Conversely, certain types of legal entities that are not registered as corporations but engage in market production are treated as corporations. These include producer cooperatives in which profits are distributed according to shareholdings, and partnerships that enjoy limited liability and behave like corporations, such as large accounting firms. As well, certain trusts and their trustees that operate like corporations are treated as corporations. In effect, any entity that is engaged in market production, is authorised to distribute profits or surpluses, and keep a full set of accounts, is potentially classifiable as a corporation or a quasi-corporation.
2.16. In SNA93, corporations that are more than 50% owned by another corporation are defined as subsidiaries of that corporation. Corporations that are up to 50% owned by another corporation can also be subsidiaries if the other corporation has the right to appoint or remove a majority of the directors of the corporation. For ABS economic collections, the definition of a subsidiary corporation is based on corporations law and is essentially the same as the SNA93 definition.
2.18. SNA93 includes the concept of ancillary corporations and recommends that, for statistical purposes, such corporations should be merged with their parent corporation. An ancillary corporation is defined as 'a subsidiary corporation, wholly owned by a parent corporation, whose productive activities are ancillary in nature: that is, strictly confined to providing services to the parent corporation, or other ancillary corporations owned by the same parent corporation'. (SNA93, paragraph. 4.40.)
2.21. Holding corporations are defined in SNA93 as 'corporations that control a group of subsidiary corporations and whose principal activity is owning and directing the group'. (SNA93, paragraph. 4.100.) A holding corporation is classified as a financial corporation if the predominant type of activity of the group of corporations as a whole is financial intermediation or auxiliary financial services. Otherwise, the holding corporation is classified as a non-financial corporation. In the absence of suitable information about the relative sizes of the subsidiaries, a holding corporation may be classified as financial or non-financial if a majority of the corporations it controls are financial or non-financial, respectively. Some corporations with 'holding company' in their title are actually ancillary corporations and therefore should be treated according to paragraphs 2.18-2.20.
2.22. SNA93 recommends that unincorporated enterprises which engage in market production, and function as if they are corporations should be treated as quasi-corporations and therefore as separate institutional units. Two main types of quasi-corporations are recognised in SNA93:
2.23. In Australia, both categories of quasi-corporations are recognised but the ABS is unable to identify all household unincorporated enterprises that qualify as quasi-corporations (as explained in paragraph 3.16). However, in the first category in paragraph 2.22, the following types of unincorporated enterprises are recognised as quasi-corporations:
This page last updated 19 June 2009
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