Dimensions of control in private limited companies

• When reading modern corporate finance literature, the question: ‘Why concentrated ownership?’, appears to puzzle the authors. The question is upside down; it should instead be: ‘Why dispersed ownership?’. Most private companies are closely held, and within these firms, each shareholder has a high degree of control. It is, therefore, interesting to ask what makes shareholders give away, share, or lose control. In this chapter, we broaden our view on control in private companies discussing legal and practical dimensions of control in private limited companies from a Nordic perspective. Using real life cases, we discuss practical dimensions of control, spanning from formal legal control to informal control, including aspects of psychological ownership.

Subject headings

SAMHÄLLSVETENSKAP  -- Juridik -- Juridik (hsv//swe)

SOCIAL SCIENCES  -- Law -- Law (hsv//eng)

Keyword

Closely held companies

Control through contract

Control through ownership

Informal control

Private benefits of control

Psychological ownership

Publication and Content Type

vet (subject category)

kap (subject category)