Non-Controlling Interest

AAA

DEFINITION of 'Non-Controlling Interest'

An ownership stake in a corporation where the held position gives the investor no influence on how the company is run. The majority of investor positions are deemed to be a non-controlling interest because their ownership stake is so insignificant relative to the total number of outstanding shares. For smaller companies, any position that holds less than 50% of the outstanding voting shares is deemed to be a non-controlling interest.

INVESTOPEDIA EXPLAINS 'Non-Controlling Interest'

For the majority of publically traded companies, the number of outstanding shares is so large that a normal position cannot influence higher level activity, which is why it is deemed as a non-controlling interest. It is generally not until one control's 5-10% that they can push for a seat on the board, or enact changes at the shareholders meetings by publically lobbying for them.

RELATED TERMS
  1. Outstanding Shares

    A company's stock currently held by all its shareholders, including ...
  2. Majority Shareholder

    A person or entity that owns more than 50% of a company's outstanding ...
  3. Board Of Directors - B Of D

    A group of individuals that are elected as, or elected to act ...
  4. Voting Shares

    Shares that give the stockholder the right to vote on matters ...
  5. Minority Interest

    1. A significant but non-controlling ownership of less than 5 ...
  6. Standard & Poor's 500 Index - S&P ...

    An index of 500 stocks chosen for market size, liquidity and ...
Related Articles
  1. The Two Sides Of Dual-Class Shares
    Options & Futures

    The Two Sides Of Dual-Class Shares

  2. Proxy Voting Gives Fund Shareholders ...
    Mutual Funds & ETFs

    Proxy Voting Gives Fund Shareholders ...

  3. Knowing Your Rights As A Shareholder
    Investing Basics

    Knowing Your Rights As A Shareholder

  4. Digging In To 13D Disclosures
    Investing

    Digging In To 13D Disclosures

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center