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Simple English definitions for legal terms
controlled company
Read a random definition: holding-company tax
A quick definition of controlled company:
A controlled company is a type of business that is owned and controlled by a person or group who owns most of the company's voting stock. This means that the person or group has a lot of power in making decisions for the company. Other types of companies include those that insure against losses caused by third parties, those that hold and manage diverse assets, and those that examine real estate titles and issue title insurance.A more thorough explanation:
A controlled company is a type of company that is under the control of an individual, group, or corporation that owns most of the company's voting stock. This means that the controlling entity has the power to make important decisions for the company, such as electing the board of directors and approving major business transactions.
For example, if a corporation owns 80% of the voting stock in a company, it is considered a controlled company because it has the power to make decisions for the company.
Another example is a family-owned business where one family member owns a majority of the voting stock and therefore has control over the company's decisions.
Controlled companies can be beneficial for the controlling entity because they can make decisions that benefit their own interests without having to consider the opinions of other shareholders. However, this can also lead to conflicts of interest and potential abuse of power.