What is a majority owner?
A majority owner is a shareholder who controls more than half the votes in a company. With a voting majority, the owner can push through most decisions at the general meeting, such as electing the board. In unlisted companies, ownership is often concentrated, so one or a few majority owners is common.
Different levels of control
- Over 50 percent of the votes gives control over decisions taken by simple majority.
- At least two-thirds is often required for the most important decisions, such as amending the articles of association.
- Over 90 percent gives the right to buy out the remaining shares (squeeze-out), while the minority also has the right to be bought out.
Majority owner and minority
A majority owner's power is balanced by the rules on minority protection, which prevent decisions that unduly disadvantage smaller owners. As a smaller owner, it is therefore wise to understand the ownership and voting structure before investing in an unlisted company.