Controlling the relative amounts of capital or shareholder is, although the proportion of shares held less than 50 percent, but according to their capital contributions or shares held by the voting rights have been enough to shareholders, shareholders have a significant impact on the resolution, if equity rather scattered, generally more than 30%.
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What is the relative control
Relative to holding company is all paid-in capital, an economic component of the investor-owned paid-up capital (equity) share, although not more than 50%, but according to the agreement with the actual control (Protocol Holdings); or relatively larger than any other economic sectors the proportion of investors (as opposed to holding). Monitoring mechanism and the relative performance of the company holding pattern analysis in a relatively controlled mode, more effective supervision of the agent, because at this time not only have an incentive to monitor the largest shareholder of the operators and management companies, other large shareholders, because a high proportion of also bear a huge financial risk, as small shareholders will not have the same free-rider motivation, will actively participate in corporate affairs. In addition, the relative control mode, the controlling shareholder's control rights more clearly, when the company is facing changes in the market, managers are incompetent behavior or decision-making mistakes, the controlling shareholders to respond quickly to change the company's business strategy and replacing management, hiring good people. Also, because there is more than one major shareholder, through effective institutional arrangements to implement the optimal shareholder supervision, while reducing the single largest shareholder of the supervision and encouragement to ease due to the dominance, under the conditions of super-voting rights over-supervision, on the other hand can effectively prevent the phenomenon of insider control. Of course, the relative holding pattern also has disadvantages: the shareholders are at stake as the status of the previous largest shareholder's ownership percentage is relatively close to the board members represent different interests of shareholders, the directors have no absolute right to vote, major policy decisions and operational decisions management may have considerable differences, it is difficult to reach agreement in a short time solution, it may delay the timing of the best solution.