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What is a minority shareholder?

Minority shareholder

A shareholder who owns less than half the total shares of a company. Minority shareholders often don’t have any real say in the running of a business, and if a dispute arises over the sale of assets for example, the majority shareholders make the final decision.

Where have you heard about minority shareholders?

You've probably heard of several disputes involving minority shareholders. In 2016, minority shareholders in Euro Disney were involved in a legal battle with parent company Walt Disney over the value of assets.

In the same year, Sky's minority shareholders voted against James Murdoch’s return as chairman.

What you need to know about minority shareholders.

Many companies are controlled by shareholders who own less than 40% or even 20% of the total shares. That’s because the remaining shares are scattered among a large number of minority shareholders who only have a small amount of stock each.

Legal protections do exist to protect minority shareholders, but these can be costly to enforce and there are ways of getting round them. If you set up a company with family or friends, it’s worth drawing up a shareholders’ agreement in case of disputes further down the line.

Find out more about minority shareholders.

Read our definition of majority shareholders to see how their rights differ from minority shareholders.

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