ABSTRACT
Companies in the private sector are legal constructs that engage in business activities on behalf of their owners. They constitute property, and their primary objective is to provide their owners with financial gain. Ownership confers broad authority to determine what companies do, and how and where they do it. This authority is not absolute, as private enterprises exist through the states that allow them to be formed, to operate and to be terminated under the conditions they set – part of their exercise of effective control. Companies are nonetheless free to act within the legal, regulatory and administrative parameters that the states establish, and this is where their owners are empowered to direct their conduct. Thus, when a company replaces a state in performing a privatized aspect of governance, the company’s owners are drawn into a position of control over the activity – the company is both a passive channel for this transfer and an active party that carries out the activity. This makes the ownership of companies, the extent to which owners actually control them or transfer control to others, and influences on the owning and controlling parties, all consequential matters to consider in view of the potential for privatizations to produce shifts in the operational control of territory toward companies.
