Define: Control Person

A control person refers to an individual or entity that has the power to direct or influence the management or policies of a company or organisation.

A control person is typically determined based on the ownership of voting securities or the ability to exercise significant influence over the company’s decision-making processes.

A control person has a fiduciary duty to act in the best interests of the company and its shareholders. They are responsible for making strategic decisions, overseeing management, and ensuring compliance with applicable laws and regulations.

Yes, a control person can be held personally liable for the actions of the company if they are found to have engaged in fraudulent or unlawful activities, or if they have breached their fiduciary duties.

Yes, a control person can be held liable for the actions of other employees or directors if they were aware of or participated in the wrongful conduct, or if they failed to take reasonable steps to prevent or address the misconduct.

The consequences for a control person found liable for misconduct can include financial penalties, disgorgement of profits, injunctions, loss of control or management positions, and reputational damage.

Yes, a control person can be removed from their position if they are found to have breached their fiduciary duties or engaged in misconduct. Shareholders or regulatory authorities may initiate legal proceedings to remove them.

Yes, a control person can transfer their control to another individual or entity through various means, such as selling their shares or transferring their voting rights. However, certain regulatory approvals or shareholder consents may be required.

Yes, control persons are subject to various legal requirements and restrictions, including disclosure obligations, insider trading restrictions, and compliance with corporate governance rules. They may also be subject to specific regulations based on the industry or jurisdiction.

Generally, a control person is not personally liable for the debts or obligations of the company unless they have personally guaranteed or assumed such liabilities. However, there may be exceptions in certain circumstances, such as piercing the corporate veil or if the control person has engaged in fraudulent activities.