Under corporate governance,Explain who is substantial shareholder

Accounting May 20, 2021

Under corporate governance,Explain who is substantial shareholder. When does a substantial shareholder need to disclose to the authorities?

Expert Solution

Answer:

Who?

The shareholder holding atleat 5% voting power or outstanding share capital in a corporation is a substantial shareholder. Such shareholder may be a person, partnership business, or any other individual or entity.

Need to disclose:

If the shareholder is no more a substantial shareholder (suppose the voting power reduced to below 5%), then he must need to disclose the fact to the corporation and the market operator – called respective authorities.

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