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implications of controlling ownership

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › implications of controlling ownership

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by AvatarStephen Widberg.
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  • July 26, 2021 at 12:41 pm #629474
    Avataraarti2407
    Member
    • Topics: 36
    • Replies: 8
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    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?

    July 27, 2021 at 7:39 am #629532
    AvatarStephen Widberg
    Keymaster
    • Topics: 17
    • Replies: 3452
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    Not necessarily. It may be that there is a separate legal agreement which gives control to another party.

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