Controlling share refers to the majority ownership or controlling interest of a company by an individual, group, or entity that holds a significant portion of the company's shares. It represents the ownership stake that gives the shareholder the power to exert influence over the decision-making process and operational activities of the company.
In most cases, a controlling share is attained when an individual or group holds more than 50% of the outstanding shares of a company's stock. This level of ownership allows the shareholder to have a significant voting power, enabling them to control the board of directors and major corporate decisions. By having a controlling share, the shareholder has the authority to shape the company's strategic direction, appoint key executives, and make crucial decisions regarding the allocation of resources.
The concept of controlling share is often associated with publicly traded companies, where ownership is fragmented among numerous shareholders. In these cases, the majority shareholder with the controlling interest has considerable influence over the company's operations and future direction. It is important to note that controlling share ownership does not necessarily equate to day-to-day management control, as this responsibility typically lies with the company's executives and management team.
Controlling shares can be valuable assets in the realm of mergers and acquisitions, as the ownership stake in a target company often determines the ability to consolidate control or block certain transactions. Additionally, controlling shares can provide significant financial benefits, such as the ability to collect a larger share of profits or dividends.
The term "controlling share" is a combination of the words "control" and "share", where "share" refers to ownership or a part of something, and "control" suggests having power or authority over something or someone.
Etymologically, "share" comes from the Old English word "sceran", meaning "to cut, shear, divide". It evolved over time to refer to a portion or part of something, such as a portion of ownership in a company. The word "share" itself has roots in Proto-Germanic and has parallels in other Germanic languages.
On the other hand, "control" originated from the Late Middle English word "controle", derived from the French term "contrerole", meaning "a counter-roll or duplicate of something, a check roll".