2.8.3 Majority-owned ventures
A majority-owned venture is a legal entity in which a society holds over half of the voting shares, with other persons owning the remainder of voting shares.
If a society owns a controlling majority of the shares, generally taken to be three-quarters of the voting shares, and in the absence of any shareholder agreements that give any special powers to minority shareholders, then for investment purposes, it can be treated in the same way as a wholly-owned subsidiary.
If a society owns a majority of voting shares but does not have full control of the legal entity, then it can still invest in this legal entity, subject to the following safeguards. The objects of the majority-owned venture should be the same as those of the society. The society should only invest capital in the form of loans or redeemable shares regardless of whether this capital is part of its general reserves or has been raised through a public offer. If the capital being invested has been raised through a public offer, then the terms of the investment should mirror the terms of that public offer. The society should have the power to veto any changes to the governing document of the legal entity, or any associated shareholder agreement.
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