eli5: What, if any, are the functional differences between someone buying 51% of your company and 100% of your company?

Question

Are there even any large functional differences?

Obviously in terms of decision making, there is no difference since 51>49 so you control who is on the board.

But what about company assets? If you own 51% of a company, I guess you do not own the assets entirely.

Do you have more freedom and power in this respect by having 100% ownership?

Thanks!

In: Other

Answer 1

Owning 51% does not always allow you to control who is in the board. Nobody would agree to own the other 49% if they thought the majority owner could run roughshod over them. Instead, the minority owner frequently negotiates specific protections for themselves.

Also, the majority owner has fiduciary obligations to the minority &- the majority can’t, for example, take all the company assets for itself. (Well, at least not without risking a lawsuit it is sure to lose )