What Is Change Control?


Answer: Change Control is the transfer of a portion, or all, of a company’s ownership interest to another party.

Change control: synonyms: takeover; buyout; purchase – an instance (as by takeover) whereby one organization acquires substantial possession and control over another. “some recent cases have invalidated the going concern doctrine because it leads to unfair changes in control”

Change Control Definition

  • A change control is a situation in which the ownership or management of a company changes. There are various reasons for this to happen, including mergers and acquisitions.
  • Change of Control is a term that broadly refers to the potential or actual transfer of control over an entity such as a business, corporation, or company.
  • A change control is a situation in which one or more individuals (or groups) acquire enough voting stock to gain majority ownership and/or management authority over the corporation. It can also be defined as a takeover bid, where an individual or group acquires enough shares to take control of the company.
  • A change of control is the transfer of ownership interest in a company from one person to another. It can occur when shareholders in the company vote on it or, less commonly, when an outside entity buys all of the shares in the company.

A change control, or COC, can be defined as two actions that must occur in order to occur.

First, one company forces a change in control of another company’s corporate structure.

Second, the motivation for the first action is due to negative reasons for the controlling stakeholder.

Simultaneous lack of confidence by shareholders leads to a drastic and sudden decline in ownership.

The implications are deep and consequences are often catastrophic especially with regards to financing options.

As a result of change-of-control strategies and tactics employed by competitive companies, many financial opportunities are lost on both sides when investments become marred by such unfortunate circumstances.

A change control plan is an essential part of work in a time-critical, high-risk environment. Activities that are planned and executed include the following:

A) establish a change control board (CCB) to prioritize and approve changes, which may be done by assigning both qualitative and quantitative criteria;

B) document approved changes and incorporate them into project plans;

C) conduct pre-approval audits to ensure compliance with CCAs;

D) monitor from early warning signs of impending problems that could lead to failures or delay delivery dates.