The Different Types of Shareholders in a Business

Institutions or individuals who own shares in a company are the various types of shareholders. Shareholders have various legal rights which include the right to vote on corporate issues, receive dividends and be able to claim assets in liquidation. The various kinds of businesses around the world offer a wide range of products and services that vary according to industry and size. For example, Amazon sells a variety of products from books to kitchen appliances, while Apple is known http://companylisting.info for its unique electronic gadgets such as personal computers, smartphones or earphones.

There are two kinds of shareholders in general: common and preferred. Anyone who holds common stock enjoys an ownership share in the company that is, they are entitled to vote rights and an element of the company’s earnings (if there is a profit). This type of stock typically will yield higher returns in the long term, but does not be able to guarantee a regular dividend. Common stockholders also have the right to check a company’s records for shareholder registers and minutes of meetings.

Preferred shareholders receive a yearly dividend in addition to having priority over common stockholders should they liquidate the company’s assets. They are not able vote on the board members or any other policies of the company. The term “shareholders” is synonymous with “stakeholders,” but stakeholders are a broad term which includes employees and customers and suppliers and local communities. Shareholders are directly invested in the financial success of a company.