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Stephen Widberg.
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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › implications of controlling ownership
A controlling ownership(more than 50% voting rights), however, does not necessarily mean that the entity has the power to govern the combined entity’s financial and operating policies so as to obtain benefits from its activities.
sir I came across this sentence in my Kaplan exam kit. And i find this slightly at odds with my understanding of control. If an entity has more than 50% voting rights than should not it straightway means that it has CONTROL over all financial and operating policy decisions of the entity?
Not necessarily. It may be that there is a separate legal agreement which gives control to another party.