A minority stake is a stake in a company that is controlled by a larger parent company.
Minority interest typically ranges from 20% to 30% of the company’s equity compared to a majority stake of over 50%.
The term “non-controlling interest” is used as a synonym for minority interest, but also reflects situations where the controlling entity may not have a controlling interest.
Parent companies will list minority interests in their subsidiaries in the equity section of their consolidated balance sheet.
Although minority interests cannot take precedence over the parent company, they still have some rights, such as auditing rights.