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In: Accounting

“If a person owns 80% of the shares in a company then they can make any...

“If a person owns 80% of the shares in a company then they can make any changes they like to the company’s constitution.” REQUIRED: Critically discuss, stating whether you agree or disagree with the above

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Expert Solution

I disagree with the statement, although A controlling interest is when a shareholder, or a group of persons acting in kind, holds a majority of a company's shares, giving it significant influence over any corporate actions.

A company constitution is an process of controlling the operation of the company and it protects the rights of minority shareholders and ensures the company is controlled by those people that you wish it to be controlled by. So shareholders having majority shares cannot make changes in the constitution without the consent of minority shareholders

Shareholders that have a controlling interest are able to direct the course of a company and make strategic and operational decisions in the company

A controlling interest is when a shareholder holds a majority of a company's voting stock which is more than 50%, shareholder does not have to have majority ownership in a company to have a controlling interest as long as they own a significant portion of its voting shares.

Having a controlling interest provides a shareholder with significant power and influence within a company. A controlling interest allows the shareholder to veto or overturn decisions made by existing board members. A controlling interest grants an investor, leverage to increase their shareholding stake in a company in a merger or acquisition or de merger

ekkarill92 answered 7 months ago
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