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Divorce of Ownership from Control

The divorce of ownership from control refers to the separation of the ownership and control of a company. In a company with a divorce of ownership from control, the individuals or entities that own the company (the shareholders) do not have direct control over the day-to-day operations and decision-making of the company. Instead, control of the company is exercised by a board of directors or other management team that is responsible for running the company.

There are several reasons why a company might have a divorce of ownership from control, including:

  1. Size: In larger companies, it may be impractical for the shareholders to be directly involved in the management of the company.
  2. Complexity: In companies with complex operations or multiple lines of business, it may be more efficient to have a dedicated management team responsible for running the company.
  3. Separation of responsibilities: In some cases, the shareholders may prefer to focus on their roles as owners, rather than being directly involved in the management of the company.
  4. Corporate governance: The divorce of ownership from control can help to ensure that the interests of the shareholders and the management team are aligned, as the management team is responsible for running the company in the best interests of the shareholders.

See also

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