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Controlling interest

A controlling interest is an ownership interest in a corporation with enough voting stock shares to prevail in any stockholders' motion. A majority of voting shares (over 50%) is always a controlling interest. When a party holds less than the majority of the voting shares, other present circumstances can be considered to determine whether that party is still considered to hold a controlling ownership interest.[1]

In the United States, Delaware corporations have a 2/3 vote requirement for a motion to pass.[citation needed] In theory, this could mean that a controlling interest would have to be over two-thirds of the voting shares.

A 2019 study published in the Virginia Law Review said dual-class stock structures, common to newly public technology companies, creates governance risks and costs, including the potential loss of economic value for non-voting shares held by public investors.[2][3]

  1. ^ Hefter, Michael; Philip, Ryan; Kolker, David. "Delaware Court Establishes "Taxonomy" For Controlling Stockholder Claims". Transaction Advisors. ISSN 2329-9134. Archived from the original on 2016-03-25. Retrieved 2015-01-16.
  2. ^ Governance, Harvard Law School Forum on Corporate; Regulation, Financial (3 April 2019). "The Perils of Lyft's Dual-Class Structure". corpgov.law.harvard.edu.
  3. ^ Bebchuk, Lucian A.; Kastiel, Kobi (April 18, 2017). "The Untenable Case for Perpetual Dual-Class Stock". doi:10.2139/ssrn.2954630. S2CID 157125087. SSRN 2954630 – via papers.ssrn.com.

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