Controlling interest
Topic: Finance
From HandWiki - Reading time: 2 min
A controlling interest is an ownership interest in a corporation with enough voting stock shares to prevail in any stockholders' motion. A majority of voting shares (over 50%) is always a controlling interest. When a party holds less than the majority of the voting shares, other present circumstances can be considered to determine whether that party is still considered to hold a controlling ownership interest.[1]
In the United States, Delaware corporations have a 2/3 vote requirement for a motion to pass.[citation needed] In theory, this could mean that a controlling interest would have to be over two-thirds of the voting shares.
A 2019 study published in the Virginia Law Review said dual-class stock structures, common to newly public technology companies, creates governance risks and costs, including the potential loss of economic value for non-voting shares held by public investors.[2][3]
See also
References
- ↑ Hefter, Michael; Philip, Ryan; Kolker, David. "Delaware Court Establishes "Taxonomy" For Controlling Stockholder Claims". Transaction Advisors. https://www.transactionadvisors.com/insights/delaware-court-establishes-taxonomy-controlling-stockholder-claims.
- ↑ Governance, Harvard Law School Forum on Corporate; Regulation, Financial (3 April 2019). "The Perils of Lyft's Dual-Class Structure". https://corpgov.law.harvard.edu/2019/04/03/the-perils-of-lyfts-dual-class-structure/.
- ↑ Bebchuk, Lucian A.; Kastiel, Kobi (April 18, 2017). "The Untenable Case for Perpetual Dual-Class Stock". doi:10.2139/ssrn.2954630. https://papers.ssrn.com/abstract=2954630.
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