What percentage of shareholding requires shareholders to inform the company?

The percentage of shareholding that requires shareholders to inform the company is 5%. This requirement is based on regulations in many jurisdictions that stipulate that shareholders must disclose their ownership interests once they acquire a certain threshold of shares. The purpose of this disclosure is to promote transparency and accountability within the company's ownership structure, allowing all stakeholders, including other shareholders, to be aware of significant ownership positions that could influence corporate governance or decision-making.

This threshold commonly set at 5% is intended to provide a balance between encouraging investment and ensuring that potential control or influence over a company is disclosed to all investors and the market at large. Shareholders reaching this level of ownership are typically required to file a notice or report, allowing regulatory bodies and the company to maintain accurate records of ownership stakes. This mechanism also helps to prevent potential market manipulation or conflicts of interest.

Understanding this requirement is crucial for investors and compliance professionals to ensure they are adhering to legal obligations regarding the disclosure of significant shareholdings.