Inspired by this question, I wondered what the implications of owning the majority (> 50%) of a company's stocks are.

Will I own said company? Will I be able to call the shots? What if someone was just simply rich to buy > 50%, but does not know how to handle the company?

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    I'm voting to close this question as off-topic because it is not about personal finance.
    – littleadv
    Commented Feb 16, 2015 at 1:44
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    It is about personal finance, because although the asker is unlikely to have the capital necessary to purchase 50% of a publicly traded stock, the answer to this question is important for understanding what stock ownership means.
    – Ben Miller
    Commented Feb 16, 2015 at 2:26
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    It's also significant to investors at a "personal finance" level, since some day for example someone might wish to take private a public company in which they hold shares, and set about acquiring the shares they need to do so. Of course, in that case shareholders should also take much more specific advice, but I think the general principles are also relevant. Commented Feb 16, 2015 at 10:41
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    All shares are some sort of ownership, but before you try to buy up 50% of Facebook, note that there are different classes of shares. Some for example give you the right to collect dividends but not vote on how the company is run. Make sure you're buying shares that confer voting rights. Commented Feb 16, 2015 at 22:38
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    Now that you mention it, I would like to do some gardening for Gadzillion Corp.
    – Zaenille
    Commented Feb 17, 2015 at 0:23

8 Answers 8


You'll own whatever fraction you bought. To own the company (as in, boolean - yes or no) you need to buy 100% of the outstanding stock.

RE controlling the company, in general the answer is yes - although the mechanism for this might not be so straight forward (ie. you may have to appoint board members and may only be able to do so at pre-set intervals) and there may be conditions in the company charter designed to stop this happening. Depending on your jurisdiction certain ownership percentages can also trigger the need to do certain things so you may not be able to just buy 50% - in Australia when you reach 20% ownership you have to launch a formal takeover bid.

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    There can also be multiple classes of shares which carry different voting rights.
    – Guy Sirton
    Commented Feb 16, 2015 at 6:39
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    And if other shareholders think what you are doing is not in the best interest of the shareholders, they can sue the company.
    – gnasher729
    Commented Feb 16, 2015 at 8:11
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    There are also laws in place many places that protect minority shareholders from various types of abuse by the majority shareholder; for instance, 51% of stock does not entitle you to sell yourself corporate assets below market rates.
    – cpast
    Commented Feb 16, 2015 at 21:46
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    @GuySirton A great example of this is Google stock: there are 3 share classes, one with no voting rights (most common), one with 1 vote (somewhat common), and one with 10 votes I think (almost all owned by Brin/Page) Commented Feb 17, 2015 at 5:45
  • @DavidGrinberg great comment David, the class definitions of share is very important in understanding a take over.
    – dooburt
    Commented Feb 17, 2015 at 13:57

Owning more than 50% of a company's stock normally gives you the right to elect a majority, or even all of a company's (board of) directors. Once you have your directors in place, you can tell them who to hire and fire among managers.

There are some things that may stand in the way of your doing this. First, there may be a company bylaw that says that the directors can be replaced only one "class" at a time, with three or four "classes." Then it could take you two or three years to get control of the company. Second, there may be different classes of shares with different voting rights, so if e.g. "A" shares controlled by the founding family gives them ten votes, and "B" shares owned by the other shareholders, you may have a majority of total shares and be outvoted by the "A" shares.

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    Note that you don't necessarily need 50% to effectively control a company. Most of the stockholders will never show up at a stockholders meeting, and so their shares will go unvoted. Some may designate a proxy, but if you can get your candidate on the list of proxies, you probably pick up a bunch of votes from people who just select one at random.
    – Jay
    Commented Feb 16, 2015 at 15:05
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    @Jay That's true for many companies, but there are still rules in place. For ordinary votes, 51% is considered the minimum necessary amount, while you ordinarily need 75% of the shares to do things like replacing directors. Once you achieve control of 75% shares, the company is effectively yours to control, but there are still special rules about what you can and can't do. For example, you can't divert profits so that the minority holders don't get dividends.
    – phyrfox
    Commented Feb 16, 2015 at 17:25

I believe Tom Au answered your key question.

Let me just add in response to, "What if someone was just simply rich to buy > 50%, but does not know how to handle the company?"

This happens all the time. Bob Senior is a brilliant business man, he starts a company, it is wildly successful, then he dies and Bob Junior inherits the company. (If it's a privately owned company he may inherit it directly; if it's a corporation he inherits a controlling interest in the stock.) Bob Junior knows nothing about how to run a business. And so he mismanages the company, runs it into the ground, and eventually it goes bankrupt. Stock holders lose their investment, employees lose their jobs, and in general everyone is very unhappy.

I suppose it also happens that someone gets rich doing thing A and then decides that he's going to buy a business that does thing B. He has no idea how to run a business doing thing B and he destroys the company. I can't think of any specific examples of this off the top of my head, but I've heard of it happening with people who make a ton of money as actors or professional athletes and then decide to start a business.

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    I'd just add to this that often the person running it poorly can get bought out by the other investors to get them out of the controlling position.
    – Bobson
    Commented Feb 16, 2015 at 23:06

Shareholders don't run companies directly

The usual pattern is that shareholders don't run companies in a practical sense, so "if someone was just simply rich to buy > 50%, but does not know how to handle the company" doesn't change anything.

In large companies, the involvement of shareholders is limited to a few votes on key issues such as allocating profit (how much to keep in company vs pay in dividends) and choosing board members. And board members also don't run the company - they oversee how the company is being run, and choose executives who will actually run the company.

If a rich person simply buys 50% and doesn't desire to get personally involved, then they just vote for whatever board members seem apropriate and forget about it.

  • While this is true, it is possible for said rich person to appoint board members who will generally do his bidding.
    – reirab
    Commented Feb 17, 2015 at 19:56

I almost agree. I am not completely sure about the ownership of stock, but to have the majority ownership of any company you must own more than 50% of a company's outstanding shares. Although a board in majority, could out vote a majority shareholder in most cases depending on the company policy regarding shareholders and the general law of the country, and to how the company is managed.

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    You need to specify which answer you almost agree with. Commented Feb 16, 2015 at 17:11

The person holding the majority of shares can influence the decisions of the company.

Even though the shareholder holds majority of the shares,the Board of Directors appointed by the shareholders in the Annual General Meeting will run the company.

As said in the characteristics of the company,the owners and the administrators of the company are different.

The shareholder holding majority of the shares can influence the business decisions like appointing the auditor,director etc. and any other business decisions(not taken in the ordinary business) that are taken in the Annual General Meeting.


It is also worth noting that one of the character defining features of a publicly traded company is that the management that is responsible for the day to day operations of the stands independent of those who have ownership.

Shareholder of a public company typically don't have influence over the day to day running of the company.

  • True - but the shareholders vote in the board of directors, who hire senior management, who hire middle management, who hire employees, who perform the daily operations of the company. Pending legal and bylaw limitations (as noted elsewhere), owning many shares of a company (even as 'little' as 10% or so) can give you influence over its operations. By the time you own 51% of the shares, you can mostly run it how you like. Commented Aug 2, 2016 at 19:21

You guys seem to have forgotten the most important part of this equation ... i work for a bank and I can tell u this as a painful fact ... every business is governed by its paperwork ... articles bylaws operating agreements amendments and minutes .. if a companys paperwork says that the 51% owner can fire everyone and move to Alaska and that paperwork is proper (signed and binding) it is with minimal excavation law... case in point every company is different .. and it is formed and governed by its paperwork.

  • A company is also governed by the laws of the jurisdiction(s) in which it operates. This may include restrictions on operating the company for the benefit of a particular shareholder, rather than the shareholder group as a whole. Commented Aug 2, 2016 at 19:22

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