The basic difficulty of owning a minority interest in a closely held corporation is there is no ready market for the minority stock should a shareholder desire to dispose of it.
A stake in a business that is managed by a bigger parent corporation is known as a minority interest.
Minority stakes typically make up 20 to 30 percent of the company's stock, whereas majority stakes typically exceed 50 percent.
In addition to serving as a synonym for minority interest, the word "non-controlling interest" also refers to circumstances in which a controlling entity may not have majority ownership.
Minority stakes in parent businesses' subsidiaries are disclosed in the equity part of their consolidated balance sheet.
Minority interests do have some rights, such as audit rights, despite the fact that they cannot outvote the main business.
Hence, there is no ready market for the minority stock should a shareholder desire to dispose of it is the basic difficulty of owning a minority interest in a closely held corporation.
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