FOR LAWYERS

Majority Shareholder

By
Lia Kopin-Green
/
January 3, 2023

What is a Majority Shareholder?

A majority shareholder is an individual or entity that owns more than 50% of the shares in a company. In United States business law, majority shareholders have a significant level of control over the company and have the authority to make decisions about its management and operations. In most cases, the majority shareholder is the founder or CEO of the company. In long-established family businesses, the majority shareholder may be a descendent of the company’s founder. It is more common for private companies to have majority shareholders than public companies. 

Key Takeaways

  • A majority shareholder is an individual or entity that owns more than half of a company’s shares.
  • Majority shareholders with voting shares have significant influence over the direction of a company.
  • While majority shareholders do not necessarily own the actual corporation, they are considered stakeholders since they have contributed a substantial financial investment.

More on Majority Shareholders

Majority shareholders, owning more than half of the voting interest in a company, play a crucial role in managing the business operations due to their significant level of control. They are able to appoint directors and other key personnel as well as make important decisions about business matters such as investments, mergers and acquisitions, and financing. Depending on the bylaws of the company, majority shareholders may be able to make these decisions unilaterally. However, some corporations require the majority shareholder to consult with or seek approval from additional shareholders. 

If you have any questions about majority shareholder rights and privileges, it’s best to contact an experienced business attorney. It is necessary to check the specific bylaws of a corporation, as the rights of majority shareholders may vary among different companies.

Majority Shareholders and Acquisitions

The majority shareholder(s) of a company play an essential role in the acquisition process. A buyout occurs when one company, known as the acquiring company, purchases the controlling stake in another company, referred to as the target company. In other words, the acquiring company must purchase over 50% of a target company’s outstanding share, or have the votes of at least 50% of the current shareholders. In certain jurisdictions, supermajority may be required for a buyout to take place. A supermajority is an amendment to a company’s corporate charter that requires a large majority or shareholders, typically 70 to 90 percent, to approve important changes in a corporation.

Bottom Line

As a majority shareholder in a company, it is necessary to be aware of your legal rights and privileges. However, since the field of business and corporate law can be quite complicated, you might find it difficult to keep up with the relevant laws and regulations in your states. Fortunately, our experienced attorneys are here to help you navigate the complex legal issues involved in operating a corporation. Whether you are a minority shareholder trying to assert your rights or a company owner trying to negotiate with majority shareholders, our attorneys have the knowledge and expertise to support you.

Featured Business Law Lawyers

Barnhisel, Barlow, & Stephens, P.C.

Google rating
5
56 years in practice
Business Law, Personal Injury
View Profile

Singing River Law

Google rating
5
16 years in practice
Business Law, Personal Injury
View Profile

Lewis Coppedge, P.C.

Google rating
5
33 years in practice
Business Law, Employment Law, Personal Injury
View Profile

Theory Law APC

Google rating
5
10 years in practice
Auto Accidents, Employment Law, Personal Injury
View Profile

Lake Tapps Legal

10 years in practice
Criminal Defense
View Profile

D Michael Mullori Jr Attorney At Law

Google rating
5
23 years in practice
Auto Accidents, Personal Injury, Premises Liability
View Profile

Related Posts

Fiduciary Duties
Lia Kopin-GreenDecember 14, 2022
Disclosure
Lia Kopin-GreenDecember 12, 2022
Assignment
Lia Kopin-GreenNovember 27, 2022
Alternative Dispute Resolution
Josef RappaportOctober 17, 2022
Attorney At Law is changing how clients connect with lawyers. By providing an innovative platform to lawyers who want to expand their practice’s reach, AAL is bringing law practices into the future.
6142 Innovation Way
Carlsbad, California 92009
Some of the content of this website may be considered attorney advertising under the rules of certain jurisdictions. The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship.
crossmenuchevron-upchevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram