Demutualization

AAA

DEFINITION of 'Demutualization'

When a mutual company owned by its users/members converts into a company owned by shareholders. In effect, the users/members exchange their rights of use for shares in the demutualized company.

INVESTOPEDIA EXPLAINS 'Demutualization'

A mutual company (not to be confused with a mutual fund) is a company created to provide specific services at the lowest possible price to benefit its users/members. In demutualization, ownership of the mutual company is separated from the exclusive right to use the services provided by the company.

RELATED TERMS
  1. Mutual Company

    A private company whose ownership base is made of its clients ...
  2. Caisse Populaire

    A cooperative, member-owned financial institution that fulfills ...
  3. Mutualization

    The process of changing a firm's business structure so the owners ...
  4. Financial Cooperative

    A financial institution that is owned and operated by its members. ...
  5. Corporation

    A legal entity that is separate and distinct from its owners. ...
  6. Credit Union

    Member-owned financial co-operative. These institutions are created ...
Related Articles
  1. What's the difference between publicly- ...
    Investing

    What's the difference between publicly- ...

  2. What are the advantages and disadvantages ...
    Investing

    What are the advantages and disadvantages ...

  3. Will ETFs Eventually Replace Mutual ...
    Mutual Funds & ETFs

    Will ETFs Eventually Replace Mutual ...

  4. Understanding The Bond Behemoth That ...
    Mutual Funds & ETFs

    Understanding The Bond Behemoth That ...

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center