A shareholder is a person, company or institution that owns a share in a corporation. When they own shares, shareholders have the right to a share of a corporation’s earnings and equity, usually in form of dividend payments. The ownership of shares allows them to participate in important corporate decisions. The voting rights are typically proportional to the number shares that are owned. The legal rights and responsibilities of shareholders may vary based on the specific constitution of a company or shareholder agreement, therefore it’s important to research these documents thoroughly before investing in shares.
The owners of a significant amount of common stock may have a significant impact on the direction of a business, and may even be capable of negotiating with potential acquisition companies. They may also be able to nominate and approve board members, as well as to vote on vital issues like whether mergers are approved or not.
Another important role of shareholders is their capacity to sue the company for infractions. As the shareholders of the shares, shareholders have the right to examine financial documents, including the company’s records and books, and can pursue legal action for wrongdoing actions of the company, board members, and executive officers.
Stakeholders are those who have a legitimate interest in the performance of a corporation for example, employees who want to see their salaries increase as well as suppliers who wish to have a steady client and customers who are looking for high-quality products and services. Non-financial stakeholders can also comprise a broader community who benefits or suffers due to the impact of the operation of the company including local economies and politicians whose campaigns depend on the success of their economics.
https://boardportalpro.org/what-are-shareholders/
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