significant influence

significant influence
In the context of a joint venture, an associate is an entity (other than a subsidiary) in which another entity (the investor) has a participating interest and over whose operating and financial policies the investor exercises a significant influence. Associates must equity account.
Where an investor participates in the financial and operating policy decisions of a company (including dividend policy) (but does not necessarily have control of those policies) then it may exercise significant influence over that company. Where the interest of the investor amounts to 20% or more of the equity voting rights of a company, significant influence should be presumed, unless the contrary can be demonstrated.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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