In the Russian practice of state participation in the management of enterprises with a state block of shares, three main mechanisms are distinguished:
representing the interests of the state;
trust management;
introduction of state blocks of shares into the authorized funds of organizations under state control, including the creation of holding companies.
1. Representation of the interests of the state. First form such a representation is Institute of State Representatives in the Management Bodies of Joint-Stock Companies. The institution of state representatives was introduced by Decree of the President of the Russian Federation of June 10, 1994 No. 1200 “On some measures to ensure state management of the economy,” and a model agreement for representing the interests of the state in the management bodies of joint-stock companies was approved two years later by a decree of the Government of the Russian Federation dated May 21, 1996 No. 625 “On ensuring the representation of state interests in the management bodies of joint-stock companies (business partnerships), part of the shares (shares, deposits) of which is assigned to federal ownership.” And only in 2000-2003 were regulations adopted regulating the procedures for appointing state representatives to the management bodies of joint-stock companies (business partnerships), part of the shares (shares, contributions) of which are assigned to federal property, and the use of shareholder rights.
The state manages the shares it owns, and also exercises its rights as a participant in business companies through the institution of its representatives appointed by the Government of the Russian Federation.
The procedure for appointing state representatives, their functions, the procedure for making decisions, and their reporting are regulated by the Regulations “On the procedure for the appointment and activities of representatives of the Russian Federation in the management bodies and audit commissions of open joint-stock companies created in the process of privatization, the shares of which are in federal ownership, as well as in in respect of which a decision was made to use the special right for the participation of the Russian Federation in their management (“golden share”)”, approved by the Decree of the Government of the Russian Federation of March 7, 2002. No. 195.
The regulations regulate the activities of state representatives in joint stock companies of federal subordination, in which they own at least 98% of the shares or the “golden share”. At the same time, for other joint-stock companies there are no regulatory documents at the federal level, and in practice one has to rely on this Regulation, which in the event of any court cases turns out to be legally untenable in relation to a joint-stock company where the share of state-owned shares is significantly lower than 98% .
In accordance with this Regulation, representatives of the state in joint stock companies can be civil servants, employees of the Federal Agency for State Property Management (Rosimushchestvo) and its territorial branches. Other citizens of the Russian Federation (with the exception of those elected to representative bodies of state power or local self-government) may be representatives on the basis of agreements concluded in the prescribed manner. Representatives of the Russian Federation in the management bodies and audit commissions of joint-stock companies in respect of which a decision has been made to use a special right (“golden share”) can only be civil servants.
Representatives of the Russian Federation on the board of directors and the audit commission of the joint-stock company, in respect of which a decision has been made to use the special right (“golden share”), are appointed by the Government of Russia on the proposal of the ministry, prepared on the basis of proposals from the federal executive body.
One representative of the Russian Federation may be appointed to the board of directors and the audit commission of a joint-stock company. At the same time, the representative of the Russian Federation on the board of directors of the joint-stock company is included in the quantitative composition of the board of directors.
The task of the state representative on the board of directors is to ensure communication between this management body and the federal state body that controls the actions of this joint stock company.
An agenda is drawn up for the meeting of the board of directors of the joint stock company. Unlike other members of the council, the state representative, before putting his issues on the agenda, sends his proposals to the relevant federal executive body, which communicates its opinion on the proposals of the representative of the Russian Federation to the body making the final decision, and transmits written statements to the representative of the Russian Federation directives on these proposals.
After approval of the agenda of the general meeting of shareholders, the representative of the Russian Federation informs the ministry and the federal executive body about its content, and if there are issues in it on which the representative of the Russian Federation has the right of veto, he also sends his proposals for its use.
The federal executive body sends written directives to the representative of the Russian Federation on the use of the veto. In the absence of written directives, the representative of the Russian Federation acts in accordance with the proposals he previously sent to higher authorities.
Before holding a meeting of the board of directors, the representative of the Russian Federation sends the agenda of the meeting of the board of directors and his voting proposals to the relevant federal executive body.
Based on the opinion of the federal executive body, the representative receives written directives for voting at a meeting of the board of directors. In the absence of written directives, the representative of the Russian Federation votes in accordance with the proposals he previously sent to higher authorities.
State management of joint-stock companies, where 98-100% of the shares are assigned to the state, is similar to the management of joint-stock companies with a “golden share”, except that the federal governing bodies develop instructions for the state representative on the board of directors jointly, and not separately.
Controlling stake- this is a certain volume of securities (shares) of a certain joint-stock company (enterprise), which are owned by the shareholder and give him power over this company. In fact, the owner of such a Central Bank package has the right to complete control over the activities of the joint-stock company, and can also autonomously make decisions regarding the most important aspects of the enterprise’s activities.
Valuation of controlling interest
If we evaluate a controlling stake in securities (shares) from a theoretical point of view, then their owner must have at least 51% of the issued securities of a certain enterprise. However, if we consider the practice carried out in many large companies, the majority of their investors have blocks of shares amounting to up to 30% of all issued securities. This is quite enough to gain complete control over the enterprise, since all shareholders do not always have the opportunity to attend a general meeting of investors, thereby giving the dominant shareholder the opportunity to make decisions alone.
In large-scale Russian enterprises, the acquisition of controlling stakes is usually carried out by large investors. This could be: the founders of the enterprise, top managers and even the state. Often, all well-known oligarchs are the owners of companies: large factories, publishing houses, ships, and so on, or rather, the owners of their controlling stakes in the Central Bank. For example, it is the holder of controlling stakes in the Central Bank of such large companies as Gazprom, Sberbank and others. Control over them can be carried out directly or with the help of state intermediary companies.
Share of shares that gives the ability to block decisions
The blocking stake of the Central Bank gives its owner the opportunity to block the main part of the intentions of the board of shareholders. It is believed that the share of the Central Bank of such a package should be 25% of all issued shares of the enterprise, however, in practice it may be less.
Percentage of shares with voting rights
During a meeting of the board of directors, only voting shares have the right to influence the final decision.
Shares can be ordinary or preferred. Accordingly, the latter give their owners certain privileges relative to the owners of ordinary securities. Preferred securities enable their owner to receive increased dividends. If you look at the ratings that are compiled annually by various analytical firms, you can immediately see that the main share of securities that bring increased dividends to owners are preferred shares.
In addition, the owner of preferred shares has the advantage of priority in receiving the property of the enterprise in the event of liquidation of the latter. However, these shares leave their owner without voting rights at the general meeting of investors. As a result, large investors become owners of ordinary shares, which give them the right to vote on the board of directors. And everyone decides for themselves what benefits to receive from the activities of the enterprise, initially purchasing shares of one type or another.
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In the course of structuring a business and building a group of companies, the question of maintaining the manageability of the entire group always arises, provided that, as a rule, the management personnel of the business is united and it is impossible to divide it between companies.
As a result, this always leads to the need to search for a management option where the owner remains able to control and influence decision-making both for the entire business as a whole and for any of its segments, despite the economic independence of each group entity.
In this case, when designing a business model, the management company can act as a link between its individual elements.
A management company is any organizational and legal form (in our experience, not only LLC or JSC, but also cooperatives, partnerships, partnerships and even non-profit organizations can act as a management company), accumulating a complex of strategic, tactical, general marketing (including brand management) ), organizational, motivational and control functions, as well as functions of scientific and technical development and financial management for all other entities of the Group of Companies.
The formation of such functionality of the management company is due to the following economic and managerial reasons:
1. The need for all entities of the group of companies to have common auxiliary functions:
accounting, legal, marketing and other services, the provision of which by employees of a specialized organization is organizationally and economically more profitable than the creation of similar staff services in each individual company.
Most often, managed legal entities do not have their own lawyer, accountant, or system administrator - all this is handled by the staff of the management company. Objectively, not every business is able to accommodate such a staff in each individual organization of the Group. But even with this type of organizational structure, there must be a central link that manages local employees.
Therefore, there are cases of creating functionally similar services both in the management company and in the managed society (for example, when the structure is branched, when individual societies are significantly removed from each other and from the management company itself), however, in this case, the management company is engaged in solving strategic problems, then how employees of a managed company perform current work that does not require high qualifications and knowledge of the strategic plan for business development as a whole.
2. The ability to quickly implement and develop, as well as adjust the previously developed strategy for the group of companies as a whole.
Undoubtedly, business owners need to have complete information regarding its functioning, financial performance, and the degree of effectiveness of previously made management decisions.
In this sense, the value of direct receipt of information about all significant events directly to “headquarters” is invaluable for both owners and top management.
3. Transfer of management from the plane of “he is the most important here, everyone knows him” to the legal field, formalization of relations between the management and subordinate companies through civil legal means and thereby ensuring the necessary degree of control over the activities of managed companies.
In our practice, we have more than once encountered situations where, as a business grows with a small number of owners, new companies are registered, the leaders of which are only formally such; in fact, management is concentrated in the hands of the real beneficiaries.
But there comes a time when the number of personnel and the number of individual organizations within one business reaches a critical level, the owners are not recognized by sight and do not obey their oral orders (and they do not have the right to issue written ones). Even worse, the nominee director can “get things wrong”, because legally he has the right to make decisions, which will lead to unfavorable consequences (primarily of a financial nature).
We must not forget about the costs of paying the nominal manager, which you will incur one way or another, as well as the need to pay social taxes.
Management through the management company helps to avoid such negative aspects.
4. The possibility of legally reducing the tax burden through the use of the simplified taxation system by the Criminal Code.
Contractual regulation of the relationship between management companies and managed companies can be mediated by two types of agreements:
contract for the provision of management services;
agreement to perform the functions of the sole executive body.
The choice of one or another contractual instrument depends on a number of factors and the specific structure of the group of companies. Let us consider the features of the application of each of the agreements separately:
Agreement for the provision of management services.
When concluding this agreement, all or some strategic, as well as auxiliary functions in relation to the operational core are transferred to the management company: legal, accounting and personnel support, security, etc., the need for which is felt by all entities of the holding, but the creation of similar divisions in each of them is unprofitable and impractical.
The task of the management company in this case is to determine the main vectors of activity (develop a marketing strategy, carry out scientific and technical development, issue a program of activities for a group of companies for the year, etc.), which all managed companies, without exception, must follow.
It should be noted that the managed company has its own sole executive body (director, individual entrepreneur or other Management company, but in the role of the sole executive body (SEO)), which exercises operational management of the company, makes all current decisions and is responsible for financial result. It is he who is listed in the Unified State Register of Legal Entities as a subject who has the right to act on behalf of the company without a power of attorney.
With such interaction between the individual executive and the management company, the first is limited only by the strategic framework set by the management company, and is completely independent in the process of managing the current activities of his company. Moreover, these frameworks (in the form of reporting forms and periods, as well as a mechanism of responsibility) can and should be laid down both in the agreement with the management company (this is the condition under which the management company undertakes management) and in the agreement with the individual executive organization itself.
However, our experience shows that owners (especially when transforming a single company into a holding) avoid delegating powers to hired managers in every possible way, fearing that they will get out of control.
In this case, reason comes into conflict with feelings: on the one hand, the owner understands the objective need to “give up” the reins of government (a non-core activity specifically for him, employment in another project, the inability to cover all areas of his business), and on the other hand, psychologically cannot come to terms with the fact that his brainchild will be managed by someone else.
In this regard, the issue of trust in the hired manager on the part of the owner becomes particularly relevant.
At the same time, one cannot fail to note the significantly higher degree of personal interest of the director in the results of the activities of the managed company, compared to the agreement on the transfer of functions of the sole executive body, which is automatically reflected in the level of his personal (and not imposed from outside) responsibility.
It is thanks to this tool for a controlled increase in the degree of independence that a synergistic effect from business structuring is achieved - tax optimization can be enhanced by increasing managerial efficiency.
In addition, in the event of any adverse consequences of the activities of the managed company (the simplest example is tax claims), it is unlikely that anyone will be able to definitely assert (and prove) that such consequences occurred as a result of the execution by the director of the managed company of direct orders of the management company.
In other words, the management company will protect itself from negative consequences, and will also have the opportunity to preserve its business reputation and established image, citing the “independent activities” of the hired director.
Agreement to perform the functions of the sole executive body
Let us recall that the possibility of transferring powers to manage an organization to the Management Company is provided for by a number of federal laws:
For example:
clause 1, art. 42 of the Federal Law on LLC: The company has the right to transfer, under an agreement, the exercise of the powers of its sole executive body to the manager. clause 1 art. 69 Federal Law on JSC: By decision of the general meeting of shareholders, the powers of the sole executive body of the company can be transferred under an agreement to a commercial organization (management organization) or an individual entrepreneur (manager).
In this case, an agreement is concluded with the management company to transfer the functions of the sole executive body. It is the management company (represented by its director) that receives the authority to act without a power of attorney on behalf of the managed company: to represent the interests of the managed company in all organizations and institutions, as well as to enter into any economic relations. Key managers of the business, its owners in this case are employees and/or participants of the management company and already at its level and on behalf of the management company perform all management functions.
Of course, the director of the management company cannot effectively manage the management company itself, and even all the managed companies, therefore, on the basis of a power of attorney, he delegates his powers to a special employee who will be the actual head of the managed company.
Moreover, such an actual manager is on the staff of the management company (!) and receives a salary from it.
The degree of control of the owners, reporting and responsibility, as well as the degree of independence of the actual manager when making decisions in this case is determined by the provisions of the employment contract with the management company.
A negative consequence of the appointment of such a manager may be a low degree of responsibility and a lack of deep personal interest in the results of the activities of the managed company.
As we can see, there is no doubt that the inclusion of a Management Company in the business model helps solve many difficulties in the presence of an extensive legal structure of the business.
At the same time, taking into account the realities and trends of tax administration, One cannot ignore the question of how the management company is viewed from this side.
After all, the existence of a management company gives grounds to talk about the affiliation of the entities managed by it among themselves (even if the owners of the companies do not coincide). Of course, when we are talking about, for example, purely accounting and legal services (not about the status of a management company as an individual sole executive organization) and such services are provided not only to organizations connected by contractual relations, but also to outside entities, it will be difficult to recognize affiliation on this basis. In the case of fulfilling the role of the sole executive body, the presence of a single managing entity for several legal entities, which are all the more bound by other agreements with each other (which usually happens if a business is built within a group of companies), will link all organizations into a single structure.
This is not critical if all entities apply the simplified tax system and there is no possibility for the tax savings described above by applying the same criminal code of the simplified tax system. However, such affiliation will attract attention if we are talking about the interaction of entities in different special regimes, which naturally leads to minimizing taxation on business income.
Considering that tax authorities are paying increasingly close attention to such structures, trying to justify the artificiality of their division into several entities or the unreasonableness of the costs of attracting the management company itself, In terms of separating the management company, the following rules must be observed:
1) The types of services provided must be specified. The more detailed the subject of the management company’s activities is described, the more difficult it is to prove the artificiality of its separation in a group of companies (see, for example, Resolution of the Seventeenth Arbitration Court of Appeal dated October 30, 2012 No. 17AP-11284/12: the taxpayer managed to win the dispute by maximizing the detail of evidence of the execution of the contract In the report on the execution of powers of the individual executive officer, the volume of work performed to manage current activities is indicated with a breakdown of the work performed by employees of specific departments (services), and even the volume of hours spent on each service is indicated).
Considering that many companies currently use various software systems that allow them to track the time spent on certain tasks by employees, the solution to the task of collecting such information can be automated.
At the same time, the management company, in the role of the sole executive body, carries out the current management of the company, a full detailed description of which is impossible in the contract. Both corporate legislation and, as a rule, company charters usually reserve residual competence for the individual executive officer: “and other things not included in the powers of other bodies of the Company.” Therefore, if the management agreement with the management company in the role of sole executive officer does not contain a specific list of the management company’s powers, it is impossible to talk about the lack of detail in the functions of the management company, and, consequently, its artificial separation. This conclusion is also supported by judicial practice:
Due to the very nature of current management activities, it is impossible to comprehensively determine the competence and scope of responsibilities of the EIO (Management Company) not only at the level of law, but also at the level of the company’s Charter, agreement on the transfer of powers, local regulations, since it is impossible to provide for all issues on a daily basis arising in the activities of the managed organization and which are not within the exclusive competence of the general meeting and the board of directors.
Resolution of the Federal Arbitration Court of the West Siberian District of May 12, 2014 No. F04-2761/14 in case No. A81-2271/2013
2) Care must be taken in the description of the procedure for calculating the management company’s remuneration for its services.
So, if you tie remuneration to the achievement of any indicators (growth in revenue, profit, number of clients, etc.), it is necessary to confirm their achievement or non-achievement each time, and draw up all the necessary documentation. Otherwise, the tax authority will challenge the payments to the Criminal Code (Resolution of the Arbitration Court of the North Caucasus District dated July 11, 2016 N F08-3871/16 in case No. A01-1790/2015, Resolution of the Fifteenth Arbitration Court of Appeal dated February 16, 2016 No. 15AP-22105/15).
As a rule, the courts, siding with the tax authority, say that they could not confirm what specific work the management company performed and how the cost of each type of its services was determined. Therefore, a description of the procedure for forming the cost of services provided in the contract itself and a breakdown of the final cost for each period of the management company’s activity is a mandatory condition for working with the Management Company.
Of course, the remuneration should include all the current expenses of the management company to maintain its activities: office rent, payroll of employees, etc. This amount forms the base remuneration amount. If the management company does not accumulate part of the business’s profits, then the remuneration may provide for a fixed fixed amount covering the expenses of the management company with a possible small increase, for example, no more than once a year (in case of an increase in the payroll or other expenses);
The above calculation of remuneration can be complicated if, for example, the payroll of employees depends on their performance indicators and changes from month to month. For this purpose, companies have developed their own systems for calculating remuneration for each employee, which can also be used as the basis for calculating remuneration for management companies. In this case, it will be necessary to detail each indicator to confirm the validity of the management costs in the declared amount.
Along with covering the basic expenses of the management company, the remuneration may also include a variable part depending on the financial result of the management company’s activities: for example, in the form of a percentage of the revenue or profit of the managed company. This can be either a monthly increase to the basic remuneration or an “annual bonus” of the management company based on the results of the financial year. In any case, remuneration in this form must be justified by the mandatory growth in revenue/profit of the managed company and confirmation that such growth is related to the activities of the management company and its employees. Moreover, of course, this part of the remuneration should not lead to the fact that the entire profit of the operating company flows to the management company, which applies a lower income tax rate.
3) Proof of the effectiveness and reality of the management company’s activities will be indicators of growth in revenue, profit, assets of the managed company, which, in turn, for example, led to an increase in taxes paid to it (this indicator will be especially valuable).
4) Evidence of the independence of the management company as an economic entity will be the performance of management functions for several companies, preferably not related to each other (for one, for example, in the role of sole executive officer, for another, the provision of only accounting services, etc.).
5) High professionalism of the staff of the management company (in comparison with the managed one), increased requirements for their level of education, work experience, etc. will also allow confirming the professional competence and independence of the management company (see, for example, Resolution of the Arbitration Court of the North Caucasus District dated January 26, 2015 No. F08-9808/14 in case NА32-25133/2013).
Taking into account the described nuances, it is necessary to carefully approach the legal recording of the actual activities of the Management Company and the procedure for its interaction with its customer of services. In addition to the constant, systematic collection of evidence confirming this activity and its usefulness for the managed companies, problems with the tax authority should not arise.
Recently, a new product was announced on the real estate market - a buyer's property package. Novostroy-M asked independent expert Ekaterina Rumyantseva, Chairman of the Board of Directors of Kalinka Group, to comment on the entry of new products into the new buildings market.
The elite residential complex "Vavilovo", built according to an individual design by architect Erasmus Pepanyan, is located in the south-west of Moscow, in one of the most environmentally friendly and green areas of the capital. This multifunctional complex includes both premium-format residential premises and an office part; rental income will be a source for repaying the costs of apartment owners for operating the complex.
“Buyer’s Property Package” is an unprecedented program for Russia, implemented only in this project. Purchasing housing gives the owner the right to become a shareholder in the management company - the open joint-stock company Vavilovo, which is implementing the project of this residential complex. The total number of company shares is equivalent to the living space of the building. Each buyer receives a block of shares proportional to the area of the purchased apartment. Thus, the entire authorized capital of the management company is distributed among the owners of the apartments, who will be able to receive not only square meters, but also a source of income to pay off the current costs of operating the complex. And with favorable conditions on the office rental market, a decent additional income, which over time (depending on market conditions, the period can be from 30 years) can exceed the costs of purchasing the “buyer’s property package,” that is, the initial costs of purchasing an apartment.
Will the “property package” be implemented by other developers? What are the advantages of this proposal, are there any disadvantages?
The idea of making apartment owners shareholders of a management company is not new; it has been discussed on the market for several years. However, so far there has been no successful experience in its implementation. What are the main risks of distributing shares between residents of the house? In my opinion, there are three potential problems.
Firstly, when a large number of people own premises, it is not easy to agree on management. The right to receive income is associated with the need to perform certain duties. There is a high probability that apartment owners who become shareholders of their management company will get an additional serious activity in their free time. They will have to participate in meetings, make decisions on the rental rate, leased space, and coordinate tenant candidates. The effectiveness of such work is difficult to predict; the likelihood of losses is high.
It will not be surprising if for some apartment owners the time and effort spent are not justified by the income received. Then they will decide to give up the load and sell their shares. In this case, it is possible that in a year or more a traditional control scheme will be established in the residential complex.
Secondly, at the initial stage of construction there is always a temptation to sell non-residential premises because they are expensive. In the first months of project implementation, it is difficult to predict how the financial situation of the developer may change, what demand will be, and how sales will proceed. In unfavorable conditions, a good initiative may not survive until construction is completed. Economic necessity may be stronger than a marketing concept.
And finally, refusal to sell office space means that the developer will not receive part of the income and will not compensate for a significant share of its costs. Naturally, he will want to return this money by increasing the cost of the square. meters. The consequences of such a decision are difficult to predict, but certainly not everyone will want to overpay for apartments due to the (albeit implicit, but very real) “load” in the form of shares of the management company; someone will doubt the success of this undertaking. As a result, implementation difficulties may arise, and you will have to look for ways to overcome them. If the developer announces discounts, this will most likely worsen the profits received. He will need to find a balance between such potential problems.
Will the package be in demand among luxury home buyers?
It is quite difficult to accurately assess the economic attractiveness of participation in a joint-stock company that manages a residential complex. It is known from open sources that the area of office space in the Vavilovo residential complex is 10,500 sq. m. meters, and the average rental rate is 21 thousand rubles per sq. m. meter per year. There are 257 apartments in the complex - let’s assume that this is the number of shareholders, then the gross monthly income on average will be 71.5 thousand rubles per month per shareholder. From it it is necessary to subtract income tax and expenses for maintaining the premises, which can reduce the total amount by half or even more. In addition, it is unclear from what part of the leased space shareholders will receive income - perhaps the usable area leased out will be smaller.
However, despite all the potential complications and pitfalls, it is worth noting that if the buyer's property package demonstrates its viability, it will almost certainly be used by other developers.
A block of shares is the number of shares of one joint stock company that are in the same hands or under the same control. The value of large packages can increase many times over if their possession allows them to influence the activities of society.
It is always important to distinguish between two types of shares – controlling (majority) and minority. A majority stake implies the presence of more than 50% of the shares of an enterprise, which gives the owner the right to exercise full control over it. In practice, when the company's shares are held by different investors, this percentage may be lower. Classification by ownership share is conditional and depends on the specific situation in the company. If a 30% stake is the largest share of ownership for a given joint stock company, then this is a majority, controlling stake.
IMPORTANCE OF THE SIZE OF SHARES
The fractional part of a share gives its owner the rights to the share that it constitutes of the whole share. The owner of a fractional share has the right to participate in the general meeting of shareholders and receive certain information (accounting statements, opinions of the auditor and audit commission, information about candidates for executive and other government bodies of the company, draft amendments to the charter and decisions of the general meeting of the joint-stock company. He can, in the event not participating in or voting against the reorganization of the company, to receive shares of the newly created companies in the amount that belonged to him in the reorganized company.
A block of shares in the amount of 1% gives the owner the right to access the shareholder database (name of the shareholder, number and categories of shares owned by him). To conduct a successful purchase, having such a database is necessary. The owners of such a package can file a claim in court against members of the board of directors or the executive body for compensation for losses caused to the company by their actions.
Owners of a block of “voting” shares in the amount of 2% can include the issues they need on the agenda of the annual meeting of shareholders and nominate candidates to the board of directors, executive bodies, audit and counting commissions. Promoting your representative to an important position increases the influence of the “strategic investor.”
The owner of a block of “voting” shares in the amount of 10% has the right to initiate an extraordinary meeting of shareholders with the determination of its agenda. Such a package adds maneuverability to the “strategist” and makes control over the activities of the joint-stock company more efficient.
Owners of a block of shares can block decisions of the general meeting of shareholders. Therefore, in Russian practice, the struggle often takes place precisely for this share in the authorized capital.
A blocking stake is a share of ordinary shares in a joint stock company, which allows their owners to veto decisions of the board of directors. If the charter of a joint stock company stipulates that a decision on such and such an issue can be made by a qualified majority, say, 3/4 of the votes, then the blocking stake will be 25% + 1 share).
Often the state retains a blocking stake in order to maintain influence on the activities of a significant joint stock company after privatization.
In practice, not all shareholders are present at meetings. And the number of votes required to make a positive decision is calculated not from the total number of voting shares, but from the shares whose owners are present at the meeting (subject to the presence of a quorum). Therefore, it is possible to block a decision with a significantly smaller number of votes.
It should be noted that cases where a 3/4 majority is required to make decisions must be fully and clearly stated in the company's charter. In this case, ownership of a 25% stake provides the opportunity to block an unfavorable decision of the general meeting of shareholders. For example:
1. Making changes and additions to the company’s charter or approving the company’s charter in a new edition.
2. Reorganization of society.
3. Liquidation of the company, appointment of a liquidation commission and approval of interim and final liquidation balance sheets.
4. Determination of the number, par value, category (type) of authorized shares and the rights granted by these shares.
5. Increase in the authorized capital of the company.
Controlling stake - the number of shares that give the shareholder the opportunity to have a decisive influence on the activities of the joint-stock company. Theoretically it should be 50% plus one share, but in practice a much smaller number is sufficient. This is explained by the following circumstances.
a) the degree of “dispersion” of shares among holders;
b) the structure of issued shares (the ratio of “voting” and “voting” shares);
c) passivity or activity of shareholders in the activities of the company (participation in general meetings of shareholders).
A controlling stake gives its owner the opportunity to manage the joint stock company. That is, in fact, the owner of a controlling stake controls (that’s why it is called “controlling”) the activities of the enterprise and can independently make strategic decisions,
