What does controlling or management shares mean?

What does controlling or management shares mean? 

In a simple definition, controlling shares are shares that the owner can use to exercise management in a company.

The controlling shareholder can influence the company in two ways; First, that he appoints one or more members of the board of directors, and secondly, that he can also appoint the CEO of the company by obtaining the majority of the members of the board of directors.

The amount of shares required to control one or more members of the board of directors in a company depends on the composition of the shareholders of that company and the number of members of the board of directors. Currently, the number of board members in the majority of companies is 5 members. If we assume that the composition of the shareholders is such that there is no small share, then the amount of shares required to obtain a member of the board of directors is 16.7%; But if the number of members of the board of directors increases to 7 members, then with a lesser amount (12.6 percent) it is possible to have one member of the board of directors. On the other hand, it is usually possible to get other members’ votes in the board of directors by negotiation. In any case, with more than 50% ownership, you can acquire a management block in a company, and the management of the company will go to the owner of this block.

Owners of controlling shares are directly involved in the company’s assets and decisions. A real or legal person who has controlling shares can make decisions in the board of directors, and in other words, he interferes in the management of the company. Control shares allow the block holder to get information about the latest company news faster and more accurately. This information is definitely effective in making decisions in the stock market, which of course is controlled within the framework of the instructions of the owners of confidential information.
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This post is written by Mahdi_kohsoltani