A shareholder, also known as a stockholder, is an individual or entity that owns shares of stock in a corporation. Some key points about shareholders:
Ownership. Shareholders are part owners of the corporation in proportion to the number of shares they hold. For example, owning 10% of the shares means they own 10% of the company.
Rights. Shareholders typically have rights that include voting on important corporate matters (like electing the board of directors), receiving dividends if declared, and accessing financial information about the company.
Types of Shares. Shareholders can own different types of shares, such as common shares or preferred shares. Common shareholders usually have voting rights and may receive dividends, while preferred shareholders often have a fixed dividend and priority over common shareholders in the event of liquidation.
Limited Liability. Shareholders enjoy limited liability, meaning they are generally not personally responsible for the debts and obligations of the corporation beyond their investment in shares.
Participation. The number of shares a shareholder owns can affect their level of participation in corporate governance, especially during shareholder meetings where key decisions are made, such as electing board members or approving major corporate actions.
Overall, shareholders play a critical role in corporate governance and decision-making processes.
