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.

BREAKING DOWN '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.

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