What can happen when one individual buys over 50% of shares in a Public Limited Company?

When an individual buys over 50% of shares in a Public Limited Company, they gain a controlling interest in the company. This means that they have enough shares to influence or decide the outcome of most shareholder votes, including the election of the board of directors and major corporate policies.

By acquiring this majority ownership, the individual effectively controls decision-making within the company. This can lead to significant changes in strategy, management, and operations, as the controlling shareholder can impose their vision for the company without needing to consult other shareholders to the same extent. This change in control can shift the direction of the company, impacting not only how it is run but also its overall performance and growth potential.

Other choices indicate scenarios that do not typically occur with majority ownership. A significant shareholder does not see their share become worthless—as owning more shares generally increases their influence rather than diminishes it. Additionally, there’s no obligation for them to sell their shares or lose voting rights; in fact, their voting power is enhanced when they acquire more shares. Thus, owning over 50% of a company fundamentally leads to an increased level of control rather than a loss of it.