Brief Definition
Minority interest refers to a situation where an investor or group of investors own less than half of a company’s shares or voting rights. They do not have the power to control the company’s decisions or operations, but may have certain rights such as voting on certain issues or receiving dividends. It is important in determining the ownership structure and control of a company.
Further Explanation
Minority interest refers to the ownership or control of less than 50% of a company’s total shares or voting rights by an individual or group of investors. In other words, it refers to a situation where an investor or a group of investors own a minority stake in a company, and do not have the power to control the company’s decisions or operations.
In most cases, minority interest refers to the ownership of common stock in a publicly-traded company, but it can also apply to other forms of ownership, such as preferred stock, convertible debt, or other financial instruments.
Minority interest can have a significant impact on a company’s operations and decision-making, as minority shareholders may have certain rights or privileges that must be taken into account by the company’s management. For example, minority shareholders may have the right to vote on certain issues, such as the election of board members or the approval of major transactions, or they may have the right to receive dividends or other forms of distribution.
Overall, minority interest is an important concept in finance and accounting, as it helps to determine the ownership structure and control of a company, and can have a significant impact on the company’s financial performance and strategic direction.