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In a small company there is usually a divorce of ownership and control.
true/false?why is this statement false? can you please explain the statement in detail
Simply that in a small company (eg a small family company) the shareholders/owners are usually also the directors and employees of the business, so there is no practical separation of ownership and control.
If you contrast this with a large listed company such as, for example, GlaxoSmithKlein, an international pharmaceutical company, there are thousands of shareholders, including institutions with substantial holdings, but who never take any part in the management of the company. Indeed, other that during general meetings shareholders have no right to exercise day-to-day control over the company. Instead, control is exercised by the board and other employees.
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