Legal Definitions - control stock

Definition: Control stock refers to the shares of a company that are owned by a person or entity that has significant influence or control over the company. These shares are often subject to special rules and regulations.

Example: John is the CEO of XYZ Corporation and owns 30% of the company's stock. This 30% is considered control stock because John has significant influence over the company's decisions and operations.

Explanation: Control stock is typically held by individuals or entities that have a major say in the direction of a company. This can include executives, board members, and major shareholders. Because of their influence, these individuals are subject to special rules and regulations when it comes to buying or selling their shares.