What is uncontrolled interest?

uncontrolled interest is the percentage of ownership or interest in a company that is less than enough to affect the overall operation and decision -making processes related to trade. For smaller companies, any degree of ownership, which is less than fifty percent, may be considered to be uncontrolled interest. In larger corporations, individual shareholders often own less than ten percent of outstanding shares and are generally considered to be uncontrolled interest, as the company is likely to maintain up to fifty -one percent of the shares as means to maintain control of the company company. For example, the possession of this kind of interest results in dividends or other compensation when the company works with profit. Depending on the structure and laws that apply to the issuance of shares in jurisdiction where the company is based, the possession of an uncontrolled interest may exclude the need to own voting shares. If this is the case, there is no need to vote for elections to the Board of Directors.

One of the advantages of investors who are interested in control is that the company can generally decide with a relatively small need to discuss the possibilities with someone who is not intimately involved in the daily operation of the company. It is assumed that directors and business officers have a degree of experience and background to make decisions that are ultimately in the best interest of the continuation of society, thus representing the best model to ensure investors continue to generate their return.

At the same time, the potential for investors with uncontrolled interest in joining and voting also provides something like a control and balance system, especially when the statutes allow these investors to vote on the elections to the Board of Directors and other specific issues. In this scenario, the holder of a control interest may consider it reasonable to consider the opinions and concern of minority investors before the final decision. PokUD will not do so, it can lead to situations where shareholders with minority interest are open to the progress of corporate raider, which can ensure a significant amount of shares and possibly force the majority shareholder to sell and leave the company open possible reorganization or even deconstruction by raider.