Shareholders

Shareholders, also known as stockholders, are individuals or institutions that own shares in a corporation. Ownership is evidenced by stock certificates or electronic records, and shareholders collectively own a portion of the company proportional to their holdings. As owners, they have rights and potential obligations but do not manage day-to-day operations unless elected as directors or appointed to a management position.

Common rights include voting on corporate matters at annual general meetings or special meetings, including the election of directors, approval of mergers or major transactions, and amendments to the charter or bylaws. Many jurisdictions provide pre-emptive rights to maintain proportional ownership, though these rights vary. Shareholders may receive dividends when declared by the board and may benefit from capital appreciation when share prices rise. In liquidation, shareholders have a residual claim after creditors and preferred shareholders.

Share types include common shares, which typically grant voting rights and a residual claim on profits, and preferred shares, which usually offer fixed dividends and priority on assets but often carry limited or no voting rights. Some shares are convertible into other securities.

Acquisition and transfer: Shares are bought and sold on stock exchanges or through private transactions; liquidity depends on market depth and company size. Shareholder meetings provide a forum for reporting, governance, and questions to management, and shareholders may vote by proxy.

Responsibilities and regulation: Shareholders influence governance, but day-to-day management is carried out by executives and the board, who owe fiduciary duties to shareholders. Regulation of share issuance, trading, disclosure, and investor protections varies by jurisdiction.

Impact: Shareholders’ interests shape corporate strategy and governance, and active ownership can influence performance and accountability.