controlling interest

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An interest in a company that gives a person or another company control of it. To have a controlling interest in a company, a shareholder would normally need to own or control more than half the voting shares. However, in practice, a shareholder might control the company with considerably less than half the shares, if the other shares were divided among a large number of different holders. For legal purposes, a director is said to have a controlling interest in a company if he or she alone, or together with his or her spouse, minor children, and the trustees of any settlement in which he or she has an interest, owns more than 20% of the voting shares in a company or in a company that controls that company. See also minority interest; participating interest.

Subjects: Financial Institutions and Services.

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