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  • Control Mechanisms in Company Ownership Structures

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    Mukesh Mewara
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    This document outlines various mechanisms that companies use to maintain family or group control over a business despite having public shareholders. These include establishing pyramid ownership structures, shareholder agreements, voting rights ceilings, multiple classes of shares with different voting powers, cross-shareholdings between companies, golden shares with special privileges, ownership ceilings, priority shares with disproportionate control, depository receipts that separate cash flow rights from control rights, and issuing of non-voting shares. Overall, the document discusses legal and financial tools companies employ to concentrate control.

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    This document outlines various mechanisms that companies use to maintain family or group control over a business despite having public shareholders. These include establishing pyramid ownership structures, shareholder agreements, voting rights ceilings, multiple classes of shares with different voting powers, cross-shareholdings between companies, golden shares with special privileges, ownership ceilings, priority shares with disproportionate control, depository receipts that separate cash flow rights from control rights, and issuing of non-voting shares. Overall, the document discusses legal and financial tools companies employ to concentrate control.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    8 views1 page

    Control Mechanisms in Company Ownership Structures

    Uploaded by

    Mukesh Mewara
    This document outlines various mechanisms that companies use to maintain family or group control over a business despite having public shareholders. These include establishing pyramid ownership structures, shareholder agreements, voting rights ceilings, multiple classes of shares with different voting powers, cross-shareholdings between companies, golden shares with special privileges, ownership ceilings, priority shares with disproportionate control, depository receipts that separate cash flow rights from control rights, and issuing of non-voting shares. Overall, the document discusses legal and financial tools companies employ to concentrate control.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 1

    1.

    Pyramid Structure (Family Control)

    2. Shareowner’s Agreement (formal and informal shareholder alliances)

    3. Voting Rights Ceiling (Involves putting restrictions / prohibiting shareowners from voting above a
    certain limit)

    4. Non – voting preferred Shares

    5. Multiple voting rights shares (different voting rights based on investment of equal value)

    6. Cross-share ownership

    7. Golden Shares

    8. Ownership ceilings

    9. Priority shares (they have special powers / veto powers, irrespective of their proportion of equity
    shares)

    10. Depository certificates

    11. Non- voting shares

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