As a stockholder, what would happened if I ended up with more than 50% of a company's

Let’s say I start buying stock in a company. Over the years, I continue buying shares until, somehow, I end up with 50.1% of the total shares available. What would happen? What could I do? Could I take over the company?

Assuming that you’re buying up regular common stock with voting privleges, and that there’s not some weird corporate by-law that keeps control in the hands of the founding family or something like that, you could in fact elect yourself and your buddies to the board of directors. They in turn would elect you chairman, hire whoever you wanted as president/ceo and then, yup, you’d control the company.

Obviously this doesn’t happen much in big companies, but it does with small ones. I worked at a place founded by two people. They figured out pretty quickly that if they each had an equal say, there woould be tie votes, so they each gave up 1% ownership to a third person, so there’d always be a tie-breaker.

If you have 50.1% of the stock, you have taken over the company (assuming all stock has equal voting privileges; some companies issue A and B stock – A stock goes to the family and automatically keeps 51% of the votes. B stock is sold to the general public).

Oh the irony of someone named Mr. Blue Sky asking this question.

This may happen, but you’d never just stumble across this fact. At 5% ownership, one must file a form with the SEC (10-D?).

You don’t even need 51% of a company, you just have to have the most shares :slight_smile:

Handy is partially correct. Generally, if you own a large block of stock, and no one else owns a similar large block of stock, you can controll the company because there will always be a few shareholders who will vote with you.

Bill Gates doesn’t own 50.1% of Microsoft, but he controlls the company because he has the largest block of stock, and the other shareholders tend to go along with what he wants. However, if all the other shareholders decided they were sick of him, they could vote him out…he’d still have his stock, but he wouldn’t be a corporate officer anymore.