Common control implies the power or authority to exercise control over assets or ventures, and directing or restraining domination as to the same, as shared by all the parties involved (including person and/ or entities). Specifically, common control includes the “collective” power of the parties involved to direct, restrict, regulate, govern, or administer the performance of the underlying assets or activities. Common control exists where the performance of the assets or activities are controlled by a number of persons, entities, or other organizational units acting together. This involves the power to direct or cause to direct the management and policies of a person or an entity, whether by ownership of stock (shareholding), voting rights, contractual terms, etc.
Common control is a type of control under which two or more entities, either by means of ownership, management, or contractual arrangement, are under the control of one group or entity. An example is the situation where two entities or more are affiliates of each other on the basis of common ownership or management by common officers, directors, or general partners.
On the other hand, joint control is a type of control in which two parties or more contractually agree to share control of an arrangement (which is binding to all parties involved). The shared or joint or collective control doesn’t exist unless business decisions relating to the activities in question require the unanimous consent of the parties involved. An entity that is a party to a control arrangement shall assess the existence of control, and that all the parties or a specific group of the parties, can collectively exercise control, and as a result act together to direct the activities that significantly affect the benefits from the arrangement.
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