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
There are some large functional differences with one of them being the ability to get additional investors/stakeholders on board while retaining a controlling share. Often to get investors you need to give away some equity in your company; when you own 100% you can raise a lot of money by selling equity and still maintaining your controlling share.
however if youre at 51%, you will likely have to lose a controlling share (aka controlling interest) to bring additional investors on board and raise more money (unless u have a royalty deal or something like that instead of equity or they agree to take non-voting shares instead). This means you either have to be willing to give up your shares or your ability to raise capital will be limited. For example you see this in Shark Tank where founders may have given away a decent chunk of equity in initial seeding rounds and are reluctant to give the sharks any additional equity that might cause them to lose a controlling share.
Also with many companies even if you own 51%, the board still has a fiduciary duty to the shareholders, NOT you.
Certain companies, especially many VC backed startups where they fill the board with VCs, may have a specific structure or bylaws that mean their board can fire a CEO even if they have a controlling interest. This is why startup founders that are backed by VC even while having a controlling interest may find themselves fired despite assuming 51% ensured they had job security. If you own 100% of a company, it is private and u can do what u want.
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