What is a majority shareholder?

Controlling shareholder (majority shareholder)

A controlling, or 'majority', shareholder is a person or organisation that holds the majority of the voting shares in a company. Many companies, especially larger ones, do not have a majority shareholder so making any significant changes will require an alliance of different minority shareholders.

Where have you heard about majority shareholders?

One context will be during a takeover, in which a successful bidder acquires enough stock to become the majority shareholder. If you are an investor, you may have been warned off investing in a company because only a minority of the shares have been 'floated', leaving a dominant controlling shareholder. For example, Mike Ashley owns 58% of Sports Direct's shares and can largely control the company's direction.

What you need to know about majority shareholders.

In general, a controlling shareholder is one who holds more than 50% of shares that carry an entitlement to vote at company meetings. There may be a number of reasons why the business has a controlling shareholder. He or she may be the founder, anxious to keep control while selling a minority stake to outside investors. Alternatively, the majority stake could have been built up over time, or may result from a corporate rescue. Many jurisdictions have legal protections for minority shareholders, and controlling shareholders may also find their actions circumscribed by the company's articles of association.