An affiliated company refers to a business entity wherein one company owns less than a majority of the voting stock of the other, or both entities are subsidiaries of a third company. In banking, it involves organizations that a bank owns or controls through stock holdings, or where the bank's shareholders and officers hold significant control or interlocking directorships.
Constructive ownership of stock refers to situations in which a taxpayer is treated as owning shares that are actually owned by another person or entity, due to the application of specific tax rules, also known as attribution rules.
An Employee Share Ownership Plan (ESOP) is a program that provides a company's employees with shares in the company. The ESOP purchases these shares with the assistance of the sponsoring company, and shares are allocated to employees who meet specific performance criteria.
An ESOT, or Employee Share Ownership Trust, is a type of employee benefit plan designed to provide employees with an ownership interest in the company.
Equity financing involves raising capital through the sale of shares in a company, providing stakeholders with ownership interests in contrast to accruing debt.
A majority shareholder is an individual or entity that holds more than half of the outstanding shares of a corporation, thereby having significant influence and control over company decisions.
A clause included in a contract of sale in which the seller retains the title of goods sold until they have been paid for. Crucial for accountants, it affects stock ownership and requires assessing the commercial substance of transactions.
A common or preferred stockholder whose name is registered on the books of a corporation as owning shares as of a particular date. Dividends and other distributions are made only to shareholders of record.
A transfer agent is an individual or firm responsible for maintaining records of a corporation’s shareholders, including names, addresses, and the number of shares owned. They handle the issuance and cancellation of stock certificates when shares are bought or sold.
