CGOV.2:5 - Archetypal Grounding

CGOV.2:5.1 - Economic majority, voting majority and a separate consent

Consider a constructed corporation whose supplied, legally applicable terms are:

The founder has 40% of the units in that distribution but 400/(400 + 60), approximately 86.96%, of the eligible votes on this resolution. The investor has 60% of those economic units and approximately 13.04% of those votes. This calculation uses the stated rights, not share count as a substitute for them.

Now include the supplied term that new borrowing above 50 requires class B consent. A proposed borrowing of 80 falls within it. Even if the general resolution receives enough votes, its passage alone leaves that consent unresolved. CGOV.3 must also establish which corporate organ may authorize the borrowing. The founder’s voting weight answers neither question by itself.

This is an instructional arrangement, not an assertion that these terms are permissible or sufficient in every jurisdiction. In a live matter, use the rights that actually apply.

CGOV.2:5.2 - An indirect economic interest

A person holds 60% of Parent, which holds 60% of Subsidiary. Assume the chosen distributions pass proportionally through both companies without deductions, preference rights or other changes. The person’s indirect participation in that distribution is 0.6 × 0.6 = 36%.

Those assumptions calculate economic participation only. To answer whether the person can cause Subsidiary to make a particular decision, recover the voting, appointment, delegation and duty relations along the path. A 36% figure supplies no such operation. Even a demonstrated ability to determine shareholder votes at both companies leaves the powers and duties of their boards to be examined for the proposed act.