Golden Share

AAA

DEFINITION of 'Golden Share'

A type of share that gives its shareholder veto power over changes to the company's charter. A golden share holds special voting rights, giving its holder the ability to block another shareholder from taking more than a ratio of ordinary shares. Ordinary shares are equal to other ordinary shares in profits and voting rights. These shares also have the ability to block a takeover or acquisition by another company.

INVESTOPEDIA EXPLAINS 'Golden Share'

These shares were most popular during the 1980s with governments who wanted to maintain control over privatized companies. Golden shares are used mainly in the United Kingdom. In the European Union however, golden shares have been deemed illegal by the government. This type of share controls at least 51% of voting rights.
A company can only issue golden shares after passing special resolutions and changing their Memorandum and Articles of Association. This document governs or dictates a company's relationship with outside businesses.

RELATED TERMS
  1. Takeover

    A corporate action where an acquiring company makes a bid for ...
  2. Shareholders' Equity

    A firm's total assets minus its total liabilities. Equivalently, ...
  3. Shares

    A unit of ownership interest in a corporation or financial asset. ...
  4. Shark Repellent

    Slang term for any one of a number of measures taken by a company ...
  5. Ordinary Shares

    Any shares that are not preferred shares and do not have any ...
  6. Acquisition

    A corporate action in which a company buys most, if not all, ...
Related Articles
  1. The Basics Of Outstanding Shares And ...
    Investing Basics

    The Basics Of Outstanding Shares And ...

  2. The 5 Types Of Earnings Per Share
    Markets

    The 5 Types Of Earnings Per Share

  3. The Alphabet Soup Of Stocks
    Investing Basics

    The Alphabet Soup Of Stocks

  4. The Two Sides Of Dual-Class Shares
    Options & Futures

    The Two Sides Of Dual-Class Shares

comments powered by Disqus
Hot Definitions
  1. Ratio Analysis

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

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

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  4. 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" ...
  5. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
  6. Direct Participation Program - DPP

    A business venture designed to let investors participate directly in the cash flow and tax benefits of the underlying investment. ...
Trading Center