What Are Shareholders?

Shareholders are individuals, companies or institutions who invest in a company by buying shares. They offer financial security to the business and are entitled to a portion of the profits. Their influence in a company is usually linked to the percentage of their shares, with the majority shareholders owning more than half the shares and minority shareholders having less than half.

There https://boardportalpro.org/what-are-shareholders/ are a variety of reasons an individual might decide to become a shareholder of any private or public company. If it’s to increase their portfolio of investments or attain the feeling of ownership and responsibility, becoming an investor comes with its own set of rights and obligations.

Shareholders are entitled, generally, to access important information such as financial statements and the reports of the company. They also have the ability to vote on crucial corporate matters like appointing directors as well as major corporate actions and mergers. Based on the company’s constitution or agreement, shareholders might also be entitled to additional rights, including appraisal of their shares in the event of liquidation.

However, unlike the owners of a sole proprietorship or partnership, shareholders aren’t personally responsible for the company’s debts and other financial obligations. This means that they can often sell their shares to a third entity without putting their personal assets at risk.