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Understanding Shareholder Rights

This document defines a shareholder as any person, company, or institution that owns at least one share of a company's stock. Shareholders are the owners of the company but are not personally liable for its debts. Unlike owners of sole proprietorships or partnerships, corporate shareholders do not play a major role in running the company and instead elect a board of directors to perform that function. Shareholders have rights such as inspecting books, suing directors for misdeeds, and receiving a portion of dividends or liquidation proceeds.

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41 views3 pages

Understanding Shareholder Rights

This document defines a shareholder as any person, company, or institution that owns at least one share of a company's stock. Shareholders are the owners of the company but are not personally liable for its debts. Unlike owners of sole proprietorships or partnerships, corporate shareholders do not play a major role in running the company and instead elect a board of directors to perform that function. Shareholders have rights such as inspecting books, suing directors for misdeeds, and receiving a portion of dividends or liquidation proceeds.

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حاتم السعداوي
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Assignment

Name

Ahmed saif almansoori

ID: 20132042

2014/20
DEFINITION of 'Shareholder'

Any person, company or other institution that owns at least


one share of a company’s stock. Shareholders are a company's
owners. They have the potential to profit if the company does
well, but that comes with the potential to lose if the company
does poorly. A shareholder may also be referred to as a
"stockholder".

INVESTOPEDIA EXPLAINS 'Shareholder'

Unlike the owners of sole proprietorships or partnerships,


corporate shareholders are not personally liable for the
company’s debts and other obligations. Also, corporate
shareholders do not play a major role in running the company.
The board of directors and executive management perform
that function. Common stockholders are, however, able to vote
on corporate matters, such as who sits on the board of
directors and whether a proposed merger should go through
(preferred stockholders usually do not have voting rights). They
also benefit when the company performs well and its share
price increases, and they have the right to trade their shares on
a stock exchange, which makes stock a highly liquid investment.

Shareholders do have rights, which are defined in the


corporation’s charter and bylaws. They can inspect the
company’s books and records, sue the corporation for
misdeeds of the directors and officers, and if the company
liquidates, they have a right to a share of the proceeds.
However, creditors, bondholders and preferred stockholders
have precedence over common stockholders in a liquidation.
Shareholders also have a right to receive a portion of any
dividends the company declares.

Shareholders can attend the corporation’s annual meeting to


learn about the company’s performance, vote on who sits on
the board of directors and other matters. They can also listen
to the meeting via conference call and vote by proxy through
the mail or online. To learn more about a company’s policies
toward shareholders, consult the company’s corporate
governance policies.

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