When does minority interest take place?

Answer 1

Minority interest in business is ownership of a company that is less than 50% of outstanding shares. Revenue and expense from "minority interests" are sometimes reported on the income statement of the owning company.

Minority interest is money belonging to other investors of a particular company. This can happen during a joint venture with 2 or more investors in the project.

Answer 2

I think he is talking about minority interest the accounting line.

In accounting terms, if a company owns a minority interest in another company but only has a minority passive position (i.e. it is unable to exert influence), then all that's recorded from this investment are the dividends received from the minority interest. If the company has a minority active position (i.e. it is able to exert influence), then both dividends and a percent of income are recorded on the company's books.

For the company that is being invested in, this amount is listed at the bottom of the income statement as a deduction.

Answer 3

Both of the answers given above are not entirely right.

Yes in strict definition, MI are defined as holders of shares of less than 50%. but then this percentage may have a controlling interest in the company.

in a listed entity, a major shareholder maybe even someone whom has own only say 20% of the stake of the companies as compared to other shareholders whom may by itself holds all less than 1%.

so in strict terms the application of MI are someone who are not able to exercise significant influence on the company.

In legal terms, if a shareholders holds say 20% of the shares and the other 80% is held by the majority but one shareholder, and if the AGM passes things that the MI do not like they are still able to apply to the court citing their reasons as oppression on the MI

But if the holders are less than a (5% or 10%) sorry forgotten my law. will not have the legal right to voice such oppression as the majority shareholder would have the legal right to buy out the remaining 10% I think

so the key to decide MI is on whether do they have a controlling say or not.

Answer 4

when the last person takes interest in something?