Running head: COMPANY LAW
Advantages and Disadvantages for Shareholders in the Control Group
One of the primary benefits of controlling shareholders is their ability to exercise veto
power. Biondi and Graeff (2020) affirm that such shareholders can change decisions from board
members, mainly if the choices are not in line with their objectives. It, therefore, creates an
environment for making strategic decisions from the controlling shareholders. The other
advantage is that shareholders in the control group get the best profits and dividends when the
company has an exemplary performance. The significant additional advantage stems from the
controlling shareholders keeping the management and the board of directors in check to thwart
them from mismanaging the firm (Biondi & Graeff, 2020). The reason is that the shareholders
aim to retain and increase their earnings. Even ...
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