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In corporate governance, a majority shareholder is a shareholder that has a majority of the shares of a company. The majority shareholder exerts complete control over the company by being able to replace the board of directors and the management. A simple majority of 50% ownership usually confers majority shareholder status. A majority shareholder can be a single individual, most often in the case of a company founder. The majority shareholder can also be another corporation. An alternative means of retaining the complete control of a majority shareholder is through the use of voting rights. In this scenario, not all shares have equal voting rights, allowing for the possibility that one person can have the same control a majority shareholder would, through ownership of the majority of the voting rights. Public companies seldom have one majority shareholder, but the situation is quite common with private companies. |
