In the professional world of the valuation of privately owned businesses, the notion of discounting the value of an ownership interest in a company due to lack of control is an ongoing consideration. The question is whether or not the value of an interest is less when it is owned by a person with less control than a person with a 100% controlling interest. Valuation professionals can differ on this but tend to agree that there is some deterioration in value.

A good analogy that helps explain this would be the ownership of a safe containing $100,000. If the owner of said safe has the combination to the safe, he or she would likely be able to sell the contents for $100,000 plus any value of the safe itself, assuming the owner was willing to pass on the combination to the new owner. However, would a 10% owner who does not know the combination be able to sell his or her interest for $10,000 plus 10% of the value of the safe? Probably not. Without the combination and the guaranteed cooperation of the owner with the combination, the 10% interest is worth something less than a straight 10% of the total value.