CONTROL PERSON Meaning and
Definition
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A "control person" refers to an individual or entity who holds significant authority and influence over a particular organization or business. This term is commonly used in the realm of finance, securities, and corporate governance. A control person typically possesses the ability to direct and govern the actions of an entity, exercising substantial control and decision-making powers over its operations, finances, management, or policies.
In the context of securities, a control person is someone who directly or indirectly owns a substantial amount of voting securities, shares, or other ownership interests in a corporation. This level of ownership provides them with significant influence over corporate decisions, particularly in matters such as board appointments, financial restructuring, mergers and acquisitions, or other strategic decisions. Control persons have the ability to shape the direction and management of the company, potentially affecting its overall performance and value.
In legal terms, a control person is also subject to certain responsibilities and obligations. These often include compliance with securities laws and regulations, adequate disclosure of their ownership interests and influence, and refraining from engaging in activities such as insider trading or market manipulation that could harm other stakeholders or the public interest. Failure to fulfill these responsibilities may lead to legal consequences, including fines, penalties, or loss of certain privileges.
Etymology of CONTROL PERSON
The term "control person" does not have a specific etymology as it is a combination of two separate words, "control" and "person".
1. Control: The word "control" originated from the Old French word "contrerole" which is a combination of "contre" meaning "against" and "role" meaning "roll" or "list". It referred to a register of expenditures and receipts, which later evolved to mean power and authority to direct or manage something.
2. Person: The word "person" has a Latin origin, derived from the word "persona" meaning "mask" or "character". Over time, it evolved to refer to an individual human being.
When these two words are combined, "control person" refers to an individual or entity that has the authority or power to govern, influence, or direct a particular situation or organization.
