Non-Controlling Interest

A non-controlling interest (NCI) is a share in a corporation that is less than 50% owned by the investor, who has limited control over how the business is operated. If an investor has an NCI, it is based on the percentage of voting rights. A minority interest is another term for this kind of investment. A non-controlling interest is also explicitly used in connection to subsidiaries where the parent business does not possess any equity interests.

Criteria for a Non-Controlling Interest

A non-controlling interest (minority interest) occurs when an ownership stake is less than 50% of the outstanding voting shares. However, sometimes the threshold is lower, as a shareholder may hold only 49% of a company, but by controlling the board of directors, is able to direct decisions of the company.
For the majority of publicly traded companies, most shareholders would be classified as holding non-controlling interests, as most have a wide shareholder base. It is generally not until an investor holds 5%-10% of the total outstanding shares that they can push for a seat on the board, or significantly drive changes at shareholders’ meetings by publicly lobbying for them.