Legal Definitions - controlling shareholder

A controlling shareholder is a person or entity that has the power to influence the decisions and activities of a company because they own a significant portion of its shares. This can be either a majority shareholder who owns more than half of the company's stock or a minority shareholder who owns a smaller percentage but has a significant number of shares.

• Majority shareholder: John owns 60% of the shares in XYZ Corporation, which gives him the power to control the company's management and make important decisions.
• Minority shareholder: Sarah owns 10% of the shares in ABC Corporation, but because the remaining shares are widely distributed among many others, she still has a significant influence on the company's activities.

These examples illustrate how a controlling shareholder can have a significant impact on a company's operations and decision-making processes. They have the power to sway votes and make decisions that can affect the company's future direction and success.