Controlling Interest

When an individual or group holds the majority of a company’s shares, that individual or group is said to have a controlling interest. This means they have a greater influence over the company’s operations.

They have the final say over what direction the company will take and their votes carry more power than most other shareholders. 

This is because the more shares a person owns, the greater their voting power. However, this only applies to shares that carry voting rights.

This also means that with none voting shares, an individual or group can’t have a controlling interest even if they have a significant share amount. 

The advantage of a controlling interest is that it gives the holder the power to attend board meetings, voice their opinions, use their votes to change the management of the company and get the most share of the company’s profits. 

One main disadvantage of having a controlling interest is that the holder is most affected if the company fails.

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