What are public purpose corporations?

Get Legal Help Today

 Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by

UPDATED: Jul 16, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

The general definition of a public purpose corporation or public benefit corporation is a public company chartered by the state, usually formed to perform a government function. Some states define a public purpose corporation as any non-profit or charitable corporation, even if it is created by private parties.

What is a public purpose corporation function?

When a government body creates a public purpose corporation, it is similar to a private non-profit organization, meaning, it is created for the purpose of benefiting the public. Many government-chartered public corporations serve in highly regulated areas, such as broadcasting and public transportation. While most public-purpose corporations are created by the state government, such as libraries or senior centers, the federal government has also created public-purpose corporations such as Amtrak and the United States Post Office.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption

What are public authority public purpose corporations?

Another type of public purpose corporation is a public authority. Like other public-purpose corporations, a public authority is created by a government body to promote a benefit to the public. However, a public authority has higher bureaucratic powers than other public-purpose corporations and often will regulate things like state or federal infrastructure. While the public authority is created and run by the government, it has a separate legal structure from the government and is generally sheltered from political influence. Public authorities are involved in operations like running highways and bridges, low-income housing, and medical care.

What are quasi-public purpose corporations?

A variation on the public-purpose corporation is the quasi-public purpose corporation. Like the public purpose corporation, the quasi-public corporation is created to benefit the public; however, a quasi-public purpose corporation is always operated privately. In a quasi-public purpose corporation, the private owners usually have partial government funding. While the owners may sell the stocks of this type of corporation publicly, creating a profit for shareholders is secondary to carrying out its public purpose. An example of a quasi-public purpose corporation is Sallie Mae, which was founded to advance student loan development.

Distinguishing Between Public Purpose Corporations and Publicly Held Corporations

Most importantly, a public purpose corporation is not to be confused with a publicly held or publicly traded corporation, wherein shares are traded in on a securities exchange or in the over-the-counter market. Public corporations refer to many types of corporations and do not require that there be any public purpose or benefit involved.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption