A form of minority interest/ non-controlling interest (NCI) that involves active participation by the holders in an entity’s management and decision making. In other words, it refers to a minority stake held by certain shareholders who actively play a role in directing an entity’s management and decision-making process. Active minority shareholders may be assigned a seat on the entity’s board of directors (BOD) or may be involved, to a certain extent, in specific areas or aspects of its activities or operations.
The minority shareholders usually own an interest (equity share) in the range from 20% to 49%, and accordingly can influence an entity’s decision-making and management of its activities to a material extent.
This is opposite to passive minority interest, where minority stakeholders do not actively participate in management or decision-making.
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