A controlled company refers to a business that is predominantly owned and controlled by an individual or a group who possess the majority of the company’s voting stock. Consequently, this grants the individual or group significant authority in making decisions for the company. Additional types of companies encompass those that provide insurance coverage for losses caused by third parties, those that possess and manage a variety of assets, and those that assess real estate titles and offer title insurance.
A controlled company refers to a company that is under the control of an individual, group, or corporation that holds the majority of the company’s voting stock. This grants the controlling entity the authority to make crucial decisions for the company, including the appointment of the board of directors and the approval of significant business transactions. For instance, if a corporation possesses 80% of the voting stock in a company, it is classified as a controlled company as it possesses decision-making power. Similarly, in a family-owned business, if one family member owns a majority of the voting stock, they have control over the company’s decisions. Controlled companies can be advantageous for the controlling entity as they can make decisions that serve their own interests without considering the perspectives of other shareholders. However, this can also result in conflicts of interest and potential misuse of power.
A controlled company is a corporation in which more than 50% of the voting power is held by an individual, a group of individuals, or another company.
Controlled companies often have more flexibility in decision-making and are not subject to the same level of scrutiny and regulation as publicly traded companies.
Controlled companies are still subject to many of the same legal requirements as other corporations, including tax laws, employment laws, and contract laws.
In some cases, a controlled company can be held liable for the actions of its controlling shareholders, especially if those actions are deemed to be in the best interest of the company.
It is possible for a controlled company to be taken over by a hostile shareholder or entity, but the controlling shareholders often have mechanisms in place to prevent this from happening.
Controlled companies are still required to file certain reports with regulatory agencies, but the level of reporting is often less stringent than for publicly traded companies.
A controlled company can go public, but the process and requirements for doing so may be different than for a company with a more dispersed ownership structure.
Controlled companies can still be subject to shareholder lawsuits, especially if the actions of the controlling shareholders are deemed to be detrimental to the company or its minority shareholders.
Controlled companies may have different tax implications than other corporations, and it is important to consult with a tax professional to understand these implications.
Controlled companies are still subject to antitrust laws, and the controlling shareholders must be mindful of these laws when making decisions that could impact competition in the marketplace.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/controlled-company/
- Modern Language Association (MLA):Controlled Company. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/controlled-company/.
- Chicago Manual of Style (CMS):Controlled Company. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/controlled-company/ (accessed: May 09 2024).
- American Psychological Association (APA):Controlled Company. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/controlled-company/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts