Controlling (majority) shareholder
What is a 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.
Find out more about controlling shareholders.
To learn more about majority shareholders and what they mean for investors, see our definition of shareholder.