What Is a Majority Shareholder?

A majority shareholder is a person or entity that owns and controls more than 50% of a company's 澳洲幸运5开奖号码历史查询:outstanding shares. As a majority shareholder, a person or operating entity has a significant amount of influence over the company, especially if their shares are 澳洲幸运5开奖号码历史查询:voting shares. Voting shares give a shareholder permission to vote on different corporate decisions, such as who should be on the company’s澳洲幸运5开奖号码历史查询: board of directors. 

When a 澳洲幸运5开奖号码历史查询:majority shareholder is in꧑ possession of voting shares, the person or entity may hold significant sway over the direction of the company.

Understanding the Majority Shareholder

A majority shareholder is often the founder of the company. In the case of long-established businesses, the majority shareholder may also be the descendants of the founder. By controlling more than half of the voting interest, the majority shareholder is a key 澳洲幸运5开奖号码历史查询:stakeholder and influencer in the business operations and strategic direction of the company. For example, it may be in their power to 💝replace a corporation’s officers or board of directors.

🔯 However, not all companies have a majority shareholder, and it is more common for private companies to have majority stakeholders than public companies.

For those companies that do have a majority shareholderIt's also true that the role of a majority shareholder can look very different from one company to another. Some remain very involved in daily operations while others leave management to company executives. The majority shareholder of a company may or may not be a member of upper management, such as the chief executive officer (CEO). This scenario is more likely in a smaller company with a limited number of shares.

In larger firms, like those with a 澳洲幸运5开奖号码历史查询:market capitalization in the billions of dollars, the firm’s i𒉰nvestors may include other institutions that hold a larger number of shares.

Majority Shareholders and Buyouts

Majority shareholders who seek to exit a business or dilute their position may make overtures to their competition or to 澳洲幸运5开奖号码历史查询:private equity firms, with the obj🦋ective of selling their stake or the entire company for a profit.

In order for a buyout to occur, an outside entity must acquire over 50% of a target company’s outstanding shares, or have the votes of at least 50% of the current shareholders who will vote in favor of the buyout. A buyout is the acquisition of a 澳洲幸运5开奖号码历史查询:controlling interest in a comp📖any. It is typically used synonymously with the term acquisition.

Even though a majority shareholder may hold more than half of company shares, they may not have the authority to authorize a buyout without additional support, depending on stipulations in the company’s bylaws. In cases where a 澳洲幸运5开奖号码历史查询:supermajority is required for a buyout, the majority shareholder can be the sole deciding factor (but only in cases where they hold enough stock to meet the supermajority req🍬uirement and the minority shareholders do not have additional rights to block the effort).

Minority shareholder rights can include the declaration of a derivative action or fraud. These actions effectively block the completion of a buyout. If the minority shareholders believe the terms of the buyout are unfair and they wish to exit the targeted business, they can exercise 澳洲幸运5开奖号码历史查询:appraisal rights. This allows a court to determine if an offered share price is fair. If the offer is, in fac🍨t, found to be unfair, the court can also compel the business initiating the buyout to offer a specified price.

Example of a Majority Shareholder

Majority shareholders are often companies that own a controlling stake in many companies. For example, the company Berkshire Hathaway, of which 澳洲幸运5开奖号码历史查询:Warren Buffett is the CEO, has a controlling inter🀅est in many other companies.

Berkshire Hathaway is a majority shareholder in other companies. But Berkshire Hathaway itself also has shareholders. However, Berkshire Hathaway doesn't have a majority shareholder.

Because most companies that have majority shareholders are very small, there are not very many companies that are household, or well-known, that have a majority shareholder (because these companies tend to be larger). One exception is Dell Technologies Inc. According to a Dell Technologies Proxy filing in May with the U.S. Securities and Exchange Commission (SEC), Micheal Dell controls about half of the company's equity (52%).